CTM41020 | Particular bodies: public bodies

Government departments are arms of the Crown and are not subject to Corporation Tax, applying the principle of Crown exemption. This includes trading funds.

But non-departmental public bodies (NDPBs) are not government departments and do not (with a very few exceptions) enjoy Crown exemption.

They are deliberately established in such a way as to have separate legal identity from the department(s) creating them and it is that separate legal identity which means that they are generally liable to CT.

CTA09/S2 is the CT charging provision and applies to the profits of companies, comprising income and chargeable gains. Company is defined at CTA10/S1119 as: … any body corporate or unincorporated association… .

NDPBs can take a variety of legal forms. Those established as Companies Act companies (companies limited by shares or by guarantee) are clearly within the scope of CT accordingly. Most however are not Companies Act companies but are established by specific legislation. The statute generally states 'there will be a body corporate known as "XYZ”'. This means that they sit squarely within the CT provisions. It follows that all the CT provisions will apply to NDPBs whether incorporated under the Companies Act or by separate Act of Parliament. They should be making CTSA returns and paying tax accordingly.

Many of them will not, however, be undertaking a trade and thus will not have trading profits. Any grant income is unlikely to be taxable, but see BIM40450 onwards. Whether or not a trade exists depends on a detailed consideration of the facts - see BIM20050 onwards.

Whether or not an NDPB is chargeable on any trading income, it will be chargeable on investment income such as income from letting or bank interest, and on any chargeable gains.