Annex 1: Minor Changes in the Law Change 2: Trading income: omission of references to a company carrying on a profession or a vocation: section 35 (and other sections) Corporate bodies and professions References to “profession” in the current corporation tax legislation
A significant number of references to “profession” in the current legislation (some two dozen or more) arise as a result of the ITTOIA split of income tax from corporation tax. Where the source legislation applied to both income tax and corporation tax and concerned professions the reference to profession was maintained in the corporation tax only rule. This was done on the basis that if companies cannot carry on professions the references do no harm, and because the issue was seen as one to address in the context of the rewrite of corporation tax.
A slightly smaller number appear in provisions that apply to both income tax and corporation tax. They are clearly needed until these provisions are split into income tax and corporation tax rules.
A dozen or so are concerned with partnerships that might be made up of both income and corporation taxpayers. If a partnership consists of an individual and a corporate body and exists to exploit the professional services of the individual it may well be correct to regard the individual as carrying on the profession but the company as carrying on a trade.
A small number cannot be explained in any of the above ways.