V2.203 Meaning of business—the business test

Part V2 Registration – deregistration

V2.203 Meaning of business—the business test

Meaning of business

V2.203 Meaning of business—the business test

This paragraph considers the indicia of business activities derived from the Lord Fisher1 case and commonly referred to as 'the business test'2.

For an overview of VAT and business more broadly, see V2.201B.

The business test indicia are as follows3:


    •     Whether the activity is a 'serious undertaking earnestly pursued' or 'a serious occupation not necessarily confined to commercial or profit-making undertakings'.


    •     Whether the activity is an occupation or function actively pursued with reasonable or recognisable continuity.


    •     Whether the activity has a certain measure of substance as measured by quarterly or annual value of taxable supplies made.


    •     Whether the activity is conducted in a regular manner on sound and recognised business principles.


    •     Whether the activity is predominantly concerned with the making of taxable supplies to consumers for a consideration.


    •     Whether the taxable supplies are of a kind which, subject to differences of detail, are commonly made by those who seek to profit by them.

It should be underlined that these 'indicia'4 have only ever been intended to be just that. Therefore the existence or absence of any particular indicator is not conclusive of whether an activity is undertaken by way of business. As HMRC has put it5:

'The questions do not form a checklist. A business may have some but not all of the features indicated. Instead they should be seen as a set of tools designed to help compare an activity you are uncertain about with features of

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