BID Levy Income and Corporation Tax: What to Enter on the CT600
Business Improvement District (BID) companies collect a mandatory levy from businesses within a defined area and spend it on services that benefit those same businesses — a structure similar to a members' club or trade association. This guide explains how BID levy income is generally treated for corporation tax and what to enter in TinyTax.
Is BID Levy Income Taxable?
The tax treatment of BID levy income depends on whether the BID company qualifies for mutual trading treatment. Under the mutuality principle, income received from a defined group in return for services provided back to that same group — and applied for the group's collective benefit rather than distributed as profit — is not treated as taxable trading income, because the payers and the beneficiaries are, in effect, the same body.
Many BID companies, structured as companies limited by guarantee where levy payers are the members and any surplus is applied to services in the BID area rather than distributed, meet this test. Whether yours does depends on:
- The BID company's governing documents and levy rules
- Whether levy payers and scheme beneficiaries are the same group
- Whether any surplus is distributed or retained for members' benefit
- Whether the company also has non-mutual income (see below)
Income That Remains Taxable
Even where the levy itself qualifies as mutual income, other income received by a BID company is usually taxable as normal:
- Bank or savings interest → taxable
- Sponsorship or income from non-levy-paying third parties → taxable
- Grant income from a local authority or central government (treated separately — see Grant Income and Corporation Tax)
- Any trading activity carried out with non-members
What to Enter in TinyTax
If you have determined — based on your own review or professional advice — that your BID levy income qualifies for mutual trading treatment, you do not need to enter it anywhere on the TinyTax CT600 form. There is no dedicated "mutual income" deduction field — simply exclude the non-taxable levy income from your figures entirely, rather than entering it and trying to deduct it afterwards.
| Field | What to enter |
|---|---|
| Turnover (Box 145) | Only non-mutual, taxable income (e.g. sponsorship, non-member trading) |
| Interest income (Box 170) | Any taxable bank or savings interest |
| All expense fields | Only expenses against taxable income |
Why "Enter and Deduct" Does Not Work Well
Entering the full levy income as turnover and then trying to deduct the mutual portion elsewhere is unnecessarily complex and can produce an incorrect computation, because TinyTax has no dedicated mutual-income deduction field and the surplus would appear on the computation as if it were a taxable adjustment. The cleanest approach is to enter only the taxable figures from the start.
Common Questions
My BID company has both levy income and other income — how do I split it?
Only the non-mutual income (sponsorship, interest, third-party trading) is taxable. Enter only that portion as Turnover or Interest income in TinyTax and leave the levy income out entirely.
Do I need to file a CT600 if my BID company only has levy income?
If levy income is your only income and it qualifies as mutual, your taxable profit is £0. You may still need to file a nil CT600 if HMRC has issued a Notice to Deliver — enter £0 figures for a trading nil return, or use the Dormant company type if the company had no activity at all in the period.
Do I need to attach accounts to the CT600?
TinyTax generates the required tax computation automatically as part of filing. Whether full statutory accounts also need to be attached depends on your company's structure — as a company limited by guarantee, standard company accounts requirements apply.
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