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The impact of the new five-year rule on farmer’s averaging on the calculation of business profits.
KEY POINTS
- Farmers can average their profits over two years under ITTOIA 2005 s 221 to s 225.
- From April 2016 the rules are to change to allow averaging over five years.
- Cash businesses will continue to be unable to average profits.
- Should the rules work retrospectively as now or by way of an irrevocable election?
The plight and challenges faced by farmers are often in the headlines. The market prices for produce the impact of weather affecting the yields of crops grown and the price of inputs such as fertiliser and feed for cattle are all variables that have a significant influence on the annual farming cycle and are beyond the farmer’s control. The result is...
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