- Significant change in activities may or may not amount to new trade

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- Distinguish between organic growth and natural change over time v. fundamental changes in business.

- There is "all the difference in the world between an organic growth of a trade and a sudden and dramatic change brought about by either the acquisition or the loss of activities on a considerable scale" (Rolls-Royce Motors Ltd).

- Constant change is nothing unusual: "Products evolve, the markets served, the relative importance of particular products, the means of marketing them and the subsidiary services and activities involved in delivery, will all be subject to continuous change. This continuous evolution must be contrasted with the "sudden and dramatic" changes that may give rise to a termination of a business and the beginning of a new one." (County Insurance, §43).

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Examples of natural change

- Changes in the mixture of different types of insurance-related activity with no sudden and dramatic change (County Insurance).

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Examples of fundamental change

- Ceasing of manufacturing and closing of retail shops (Seaman v. Tucketts).

- The disposal of four of six divisions, including by far the largest, to a third party (Rolls Royce).

- A complete ceasing of activities for a period, combined with a change in the nature of activities carried on (Netlogic).

- Ceasing manufacturing of the principal product of the company and instead reselling a product manufactured by another (Gordon & Blair v. IRC).

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Legislation: 

Cases: 

County Insurance Services Limited v. HMRC [2025] UKFTT 1440 (TC), Judge Frost; 

HMRC manuals: 

Commentary: 

See also:

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