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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