Part 3

Trading income
Chapter 5

Trade profits: rules allowing deductions

Contributions to local enterprise organisations or urban regeneration companies

Approval of local enterprise agencies
84
1
The relevant national authority may approve a body as a local enterprise agency for the purposes of section 82 only if conditions A and B are met.
2
But if those conditions are met, the body may be approved—
a
whatever its status or structure, and
b
even if it is not described as a local enterprise agency.
3
Condition A is that the relevant national authority is satisfied—
a
that the body's sole aim is the promotion or encouragement of local enterprise, or
b
that one of the body's main aims is the promotion or encouragement of local enterprise and that it has or is about to have a separate fund for the sole purpose of pursuing that aim.
4
For this purpose “local enterprise” means industrial and commercial activity or enterprise in a particular area in the United Kingdom, with particular reference to encouraging the formation and development of small businesses.
5
Condition B is that the body is precluded from paying or transferring any of its income or profit directly or indirectly—
a
to any of its members, or
b
to any person charged with the control and direction of its affairs.
6
The payment of—
a
reasonable remuneration for goods, labour or power supplied or for services provided,
b
reasonable interest on money lent, or
c
reasonable rent for premises,
does not count as a payment or transfer of income or profit for the purposes of subsection (5).
Pt. 3 modified (1.1.2010) by Northern Rock plc (Tax Consequences) Regulations 2009 (S.I. 2009/3227), regs. 1, 4(1)