CSE4140 | How the conditions are to be interpreted: ‘Distortion of competition’: What about commercial operators?

HMRC would not normally expect a third party commercial supplier to be able to meet the qualifications for membership of a CSG as they are generally fully taxable organisations who would not qualify for membership. Similarly a third party commercial provider could not act as a CSG unless it was solely constituted of (was fully owned and controlled by) members who themselves qualify for CSG membership. However should a commercial outsourcer qualify for CSG membership it cannot use that membership qualification to take advantage of the exemption for its commercial outsourcing activity.