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HMRC internal manual

Business Income Manual

Farming quotas: general

Over the years, various quota systems have operated within the UK farming industry to regulate production, or the entitlement to production subsidies. Most of these have, since 2005, been subsumed within the EU single payment scheme. See BIM55125 for detail.

Milk quotas, however, are still in operation, although they are expected to be discontinued in 2015. A milk quota (see BIM55335 and CG77820 onwards) allows a farmer to produce a certain amount of milk without incurring a supplementary levy.

Quotas and the single payment system are administered by either the Rural Payments Agency or equivalent bodies set up under the devolved administrations.

You may also come across a sugar beet quota but this is a misnomer. Such amounts are really contract tonnage entitlements. They are not genuine quota, but are rather part of the ordinary arrangements farmers make for disposing of their products. There is a long succession of decided tax cases where sums derived from the disposal of such contracts have been held to be revenue receipts. See BIM35500 onwards.