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HMRC internal manual

Business Income Manual

Farming: herd basis: class of herd

S112(1)(c), S124(1) Income Tax (Trading and Other Income) Act 2005, S110(1)(c), S122(1) Corporation Tax Act 2009

A herd basis election must specify the class of herd to which it relates, and will then apply to all herds of that class kept by the farmer making the election. A separate election is necessary for each class.

Herds are regarded as of the same class if:

  • the animals in them are of the same species (irrespective of breed), and
  • the products for the sake of which they are kept are of the same kind.

For example, if a farmer has two dairy herds, one Friesian and the other Ayrshire, both are of the same class and would be covered by a single election, so both would have to be dealt with in the same way. But if a farmer has a dairy herd (producing milk) and a beef suckler herd (producing beef calves), they fall into separate classes as the products for the sake of which they are kept are different. Thus a separate election would be needed for each herd and the farmer could choose to make an election for one herd but not the other.

Where there is a change in the purpose for which a herd is kept, see BIM55615.