In March the Government announced that, from 6 April 2016, Self-Employed Farmers will be able to average their profits over five years for income tax purposes.
Currently farmers can average their profits over two consecutive years in order to minimise the effect of fluctuations in profits caused by changing weather and market conditions. Averaging can prevent excessive rises in tax bills and payments on account if, on occasion, a highly profitable year pushes farmers into higher tax rates.
Recent price volatility has caused the NFU and other pressure groups to appeal for further relief for farmers, and later on in the year the consultation period for this new measure will take place. Hopefully this extended relief will allow more effective planning and budgeting with regard to tax bills and general business expenditure.
For further information please contact Green & Co.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.