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HMRC internal manual

Business Income Manual

Farming grants and subsidies: general

There are a wide range of grants and subsidies which farmers may be eligible to receive from both governmental and non-governmental bodies.

In the period after the second world war, grants were given to improve efficiency and encourage agricultural production including, for example, grants to grub up hedges. In recent years there have been surpluses and the emphasis has changed to limiting production (for example, by set-aside) and improving the environment (including, for example, planting of hedges). Most grants linked to production were subsumed into the Single Payment Scheme. See BIM55125 onwards.

The range of available grants, and the rules relating to any particular grant, are subject to frequent change. Accordingly, these paragraphs do not set out to provide details of the rules or the tax treatment of particular grants, They provide, however, the general principles which should enable the correct treatment of any particular grant to be determined. A small number of grants which have been found to cause doubt or difficulty are dealt with at BIM55165.