Budget 2015 - amendment to income tax rules for self-employed farmers

It was announced last week that the Government plans to extend the period over which self-employed farmers can average their profits for income tax purposes. Stephanie Dennis of Hewitsons explains the implications.

 

From April 2016, farmers will be able to average their profits over five years, as opposed to the current two years.

In theory, this means that if a farmer has a good year followed by several bad years, he will be able to average out the profits from the preceding five years and pay tax on the average profits thereby avoiding a larger tax bill during a “bad” year.

This will give farmers is the ability to manage the volatility within the farming market and focus on investment without having to worry about a large income tax bill unexpectedly landing on them.

This promise comes following lobbying from the NFU and is part of the Government’s ‘Making Tax Easier’ initiative.

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For more information please contact Stephanie Dennis on 01604 233233 or click here to email Stephanie.

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