ANNEX 1:: MINOR CHANGES IN THE LAW Change 13: Trading income: omission of references to a company carrying on a profession or a vocation: Schedule 4 (section 681DP of ITA)
This change omits references to a profession and to a vocation where the source legislation refers to the carrying on by a company of a trade, profession or vocation.
The change is reflected in numerous sections in Part 3 of CTA 2009 (trading income). It is included in the origins of the main provisions affected, where it is acknowledged as Change 2. It is carried through into new section 681DP of ITA (inserted by Schedule 4).
There are strong grounds for believing that for the purposes of the charge to corporation tax there are no activities that should be taken to constitute the carrying on of a profession or vocation by a corporate body or unincorporated association. There is a full discussion of the issues involved in Change 2 in Annex 1 to the explanatory notes on CTA 2009.
It is theoretically possible that the application of trading income rules to activities that a company could argue is a profession or a vocation could lead to a change in the measure of taxable profits.
This change is in principle adverse to some taxpayers and favourable to others. But it is expected to have no practical effect as it is in line with generally accepted practice.