Corporation Tax Act 2010 Explanatory Notes

Corporation Tax Act 2010

2010 CHAPTER 4

Introduction

Part 22: Miscellaneous provisions

Chapter 8: Exemptions

Section 987: NHS foundation trusts

2930. This section removes some classes of activity carried on by NHS foundation trusts from the exemption to corporation tax in section 985. It is based on section 519A(3), (4), (5), (6), (7), and (8) of ICTA.

2931. The exception from the exemption broadly applies to commercial activities.

2932. Subsection (1) provides that an order must be made by the Treasury for the exception to apply.

2933. Under the terms of Health and Social Care (Community Health and Standards) Act 2003 an NHS foundation trust is not obliged to carry on commercial activity through a separate company. Such activity may be subject to corporation tax if the conditions set out in subsections (2) and (3) are met.

2934. The taxation treatment of NHS foundation trusts may be contrasted with that for local authorities and local authority associations (see section 984). Using powers under section 99(4) of the Local Government Act 2003, the Government issued the Local Government (Best Value Authorities) (Power to Trade) (England) Order 2004 (SI 2004/1705). This order allows local authorities to trade but provides that the trade must be carried on by a company.