SCHEDULES
SCHEDULE 5Enterprise management incentives
Part 3Qualifying companies
Excluded activities: wholesale and retail distribution
17
1
This paragraph supplements paragraph 16(b).
2
A trade of wholesale distribution is one in which the goods are offered for sale and sold to persons—
a
for resale by them, or
b
for processing and resale by them,
to members of the general public for their use or consumption.
3
A trade of retail distribution is one in which the goods are offered for sale and sold to members of the general public for their use or consumption.
4
A trade is not an ordinary trade of wholesale or retail distribution if—
a
it consists, to a substantial extent—
i
in dealing in goods of a kind which are collected or held as an investment, or
ii
in that activity and any other excluded activity taken together, and
b
a substantial proportion of those goods are held by the company for a period which is significantly longer than the period for which a vendor would reasonably be expected to hold them while endeavouring to dispose of them at their market value.
5
In determining whether a trade carried on by any person (“P”) is an ordinary trade of wholesale or retail distribution, consideration must be given to the extent to which it has the following features—
a
the goods are bought by P in quantities larger than those in which P sells them;
b
the goods are bought and sold by P in different markets;
c
P employs staff and incurs expenses in the trade in addition—
i
to the cost of the goods, and
ii
in the case of a trade carried on by a company, to any remuneration paid to any person connected with it;
d
there are purchases or sales from or to persons who are connected with P;
e
purchases are matched with forward sales or vice versa;
f
the goods are held by P for longer than is normal for goods of the kind in question;
g
the trade is carried on otherwise than at a place or places commonly used for wholesale or retail trade;
h
P does not take physical possession of the goods.
6
The features in sub-paragraph (5)(a) to (c) are indications that the trade is such an ordinary trade.
7
Those in sub-paragraph (5)(d) to (h) are indications to the contrary.