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HMRC internal manual

Business Income Manual

Farming in tax law: contract farming

S996(1) Income Tax Act 2007, S1125 Corporation Tax Act 2010

Contract farming is an arrangement whereby a contractor carries out operations of husbandry as agent for the landowner. Even where the contractor carries out all, or substantially all, the operations of husbandry on a particular farm, the arrangement should not be confused with share farming (see BIM55070 onwards). In contract farming cases the landowner is likely to be the occupier of the land and therefore farming.

The contractor is not farming and is chargeable as a trader on his or her profits as a contractor.