Extended period of farm profits averaging begins

From the 6 April, farms can average their profits for income tax purposes over five years rather than two.

Image: Andy Stephenson
Image: Andy Stephenson

The new rule, initially announced in the 2015 Budget, is intended to help farmers with fluctuating profits better manage risk and the impact of global price changes.

Defra secretary Elizabeth Truss said: "Having a tax system that accommodates the realities faced by farmers in a way that is simple to understand and use will also give farmers a vital tool to thrive in the face of volatility."

She added: "By remaining in the EU we avoid years of complication and uncertainty and can help build greater resilience in the supply chain."

The Treasury estimates that over 29,000 farmers can benefit from the changes, saving an average of £950 a year.

Farmers retain the option of averaging profits over two years, following industry feedback.


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