BIM14010 - Trading income: trades, professions and vocations

The word 바카라 사이트˜trade바카라 사이트™ is not comprehensively or generally defined in tax law although some activities, such as a venture in the nature of trade, are specifically included. 바카라 사이트˜Trade바카라 사이트™ therefore takes its ordinary meaning, which normally involves commercial operations by a trader who provides goods or services to his or her customers in exchange for a reward. Whether a trade exists in any given circumstances is a question to be decided on the facts of the case. The Courts do not claim to have defined 바카라 사이트˜trade바카라 사이트™ exhaustively, but over the years characteristics indicative of trading have been identified. These are considered in detail at BIM20050 onwards.

Neither 바카라 사이트˜profession바카라 사이트™ nor 바카라 사이트˜vocation바카라 사이트™ has any statutory definition and they, too, take their ordinary meanings.

A 바카라 사이트˜profession바카라 사이트™ historically meant the three learned professions of the Church, Medicine and the Law but today the term goes much wider and normally involves some substantial exercise of intellectual skill.

바카라 사이트˜Vocation바카라 사이트™ has a wide meaning related to the way a person passes his or her life and indicates a calling, although not necessarily one related to religion or high-minded service to others. A bookmaker and a jockey have been held to engage in vocations and authors, dramatists and professional singers have all been dealt with by the Courts on the basis that they carried on vocations.

The difference in practice causes few problems and it is rarely necessary to debate the point when a taxpayer is clearly carrying on one or the other. If the question is at issue then it has to be decided on the facts of the case (as with the meaning of 바카라 사이트˜trade바카라 사이트™, see BIM20070).

There are specific statutory provisions which apply only to a 바카라 사이트˜trade바카라 사이트™ or only to a 바카라 사이트˜profession or vocation바카라 사이트™ so that the distinction is of some practical significance. Those provisions include the valuation of work in progress at discontinuance (see BIM33540), expenses of research and development (see S87 Income Tax (Trading and Other Income) Act 2005) and expenses for patents, designs and trademarks (see BIM45950 onwards).

There is no practical distinction between a profession and a vocation.