Farming quotas: supplementary levy
The supplementary levy is an amount which the farmer may have to pay on every litre of milk he or she produces in excess of his or her quota. But it is only imposed if the total UK milk production exceeds the total UK quota. Also it may, in a particular year, be subject to a threshold up to which producers can exceed their quota without incurring any supplementary levy. In some years there has been no supplementary levy but in other years it may be as high or higher than the producer price per litre received by the farmer. The payment of supplementary levy is an allowable trading deduction.