VBNB15000 - VAT Business and Non-Business Basics: UK Law Definition of Business

Section 94, VAT Act 1994 Meaning of “business” etc.

This section provides the legal basis for the treatment of particular activities as businesses for VAT purposes:

(1) In this Act “business” includes any trade, profession or vocation.

(2) Without prejudice to the generality of anything else in this Act, the following are deemed to be the carrying on of a business

(a) the provision by a club, association or organisation (for a subscription or other consideration) of the facilities or advantages available to its members; and

(b) the admission, for a consideration, of persons to any premises.

(4) Where a person, in the course or furtherance of a trade, profession or vocation, accepts any office, services supplied by him as the holder of that office are treated as supplied in the course or furtherance of the trade, profession or vocation.

(5) Anything done in connection with the termination or intended termination of a business is treated as being done in the course or furtherance of that business.

(6) The disposition of a business as a going concern, or of its assets or liabilities (whether or not in connection with its reorganisation or winding up), is a supply made in the course or furtherance of the business.

These section 94 definitions are not designed to be exhaustive. The VAT meaning of business has emerged through the judgments of the Courts.

It is important to note that, although the definition of business is similar to that used for Direct Tax, the courts have seen that “business” can have a different meaning for VAT purposes. It should not be assumed that direct tax legal precedent can be directly applied.