The Enterprise Act 2002 (Mergers and Market Investigations) (Determination of Control and Turnover for Penalties) Regulations 2024

Schedule Turnover of an enterprise

Regulation 3 Interpretation 1 (1) In this Schedule— “credit institution” means a credit institution as defined in section 417 of the Financial Services and Markets Act 2000 (definitions); “financial institution” means a financial institution as defined in Article 4(1)(26) of Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/2012 (definitions), or any undertaking located outside the United Kingdom which does not fall within that definition but which carries on equivalent activities; “insurance undertaking” means— an insurance undertaking as defined in section 417 of the Financial Services and Markets Act 2000, a reinsurance undertaking as defined in section 417 of the Financial Services and Markets Act 2000, an overseas insurance undertaking, or an overseas reinsurance undertaking; “overseas insurance undertaking” means an undertaking— with a head office located in a country or territory other than the United Kingdom, and which effects or carries out contracts of insurance as principal; “overseas reinsurance undertaking” means an undertaking— with a head office located in a country or territory other than the United Kingdom, and which effects or carries out contracts of insurance that are limited to reinsurance contracts as principal. (2) The provisions of this Schedule are to be interpreted in accordance with generally accepted accounting principles and practices. Turnover of an enterprise 2 (1) The turnover of an enterprise is the sum of all amounts derived directly or indirectly from the sale of goods and provision of services (both in and outside the United Kingdom) falling within the activities of the enterprise, after the deduction of sales rebates, value added tax and other taxes directly related to turnover. (2) Paragraphs 5 and 6 also apply to determine the turnover of an enterprise. (3) But where all or any of the activities constituting an enterprise are the activities of a credit institution, a financial institution or an insurance undertaking, paragraph 3 or (as the case may be) paragraph 4 applies instead of this paragraph to determine the turnover of the enterprise in respect of those activities. Turnover in respect of activities of a credit institution or financial institution 3 (1) The turnover of an enterprise in respect of activities of a credit institution or financial institution is the sum of the following income items received by the institution, after the deduction of value added tax and other taxes directly related to those items— (a) interest income and similar income; (b) the following income from securities— (i) income from shares and other variable yield securities; (ii) income from participating interests; (iii) income from shares in affiliated undertakings; (c) commissions receivable; (d) net profit on financial operations; (e) other operating income. (2) Expressions used in sub-paragraph (1) have the meanings given by Council Directive (EEC) 86/635 of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial institutions. (3) Paragraphs 5 and 6 also apply to determine the turnover of an enterprise in respect of activities of a credit institution or financial institution. Turnover in respect of activities of an insurance undertaking 4 (1) The turnover of an enterprise in respect of activities of an insurance undertaking is the total value of gross premiums received, comprising all amounts received and receivable in respect of insurance contracts issued by or on behalf of the undertaking, including outgoing reinsurance premiums, and after deduction of taxes and parafiscal contributions or levies charged by reference to the amounts of individual premiums or the total volume of premiums. (2) Paragraphs 5 and 6 also apply to determine the turnover of an enterprise in respect of activities of an insurance undertaking. Subsidies 5 (1) The turnover of an enterprise includes any subsidy given in respect of the enterprise, determined in accordance with this paragraph. (2) For the purposes of sub-paragraph (1), “subsidy” means financial assistance which— (a) is given, directly or indirectly, from public resources by a public authority, (b) confers an economic advantage on one or more businesses whose activities or part of whose activities constitute the enterprise, and (c) is specific such that it benefits one or more businesses whose activities or part of whose activities constitute the enterprise over one or more other businesses with respect to the production and sale of goods and the provision of services. (3) For the purposes of sub-paragraph (2), the means by which financial assistance may be given include— (a) a direct transfer of funds (such as grants or loans); (b) a contingent transfer of funds (such as guarantees); (c) the forgoing of revenue that is otherwise due; (d) the sale of goods; (e) the provision of services; (f) the purchase of goods and services. (4) For the purposes of sub-paragraph (2)(a), “public authority” means a person who exercises functions of a public nature. (5) Financial assistance given by a person who is not a public authority is to be treated for the purposes of sub-paragraph (2)(a) as financial assistance given from public resources by a public authority if the involvement of a public authority in the decision to give financial assistance is such that the decision is, in substance, the decision of the public authority. (6) For the purposes of sub-paragraph (5), the factors which may be taken into account when considering the involvement of a public authority in the decision of a person to give financial assistance include, in particular, factors relating to— (a) the control exercised over that person by that public authority, or (b) the relationship between that person and that public authority. (7) For the purposes of this paragraph, financial assistance is to be treated as given to a business if the business has an enforceable right to the financial assistance. Further provisions about determining turnover 6 (1) Where the person to whom a provisional penalty notice is issued owns or controls more than one enterprise, the turnover of those enterprises does not include amounts derived from the sale of goods and provision of services between them. (2) Where in the accounts or other information used by the relevant authority to calculate the turnover of an enterprise any figure is expressed in a currency other than sterling, the relevant authority may determine the equivalent in sterling, applying whatever rate or rates of exchange the authority considers appropriate and rounding the resulting figure up or down as it considers appropriate. (3) Where an acquisition, divestment or other transaction or event has occurred since the end of the period by reference to which the turnover of the enterprise is determined in accordance with regulation 3 which the relevant authority considers may have a significant impact on the turnover of the enterprise, the relevant authority may take account of that acquisition, divestment or transaction or event if it considers it appropriate to do so and accordingly increase or (as the case may be) reduce by such amount as it considers appropriate the amount which would otherwise constitute the turnover of the enterprise.