beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Business Income Manual

Averaging: farmers

S221 Income Tax (Trading and Other Income) Act 2005

Qualifying trades, professions or vocations for the purposes of averaging include:

  • farming or market gardening in the UK;
  • intensive rearing in the UK of livestock or fish on a commercial basis for the production of food for human consumption.

Farms or market gardens outside the UK are not included.

Averaging is thus available to:

  • sole traders,
  • partners (but excluding corporate partners),
  • executors, personal representatives and trustees,

who are carrying on a trade of farming or market gardening or intensive rearing, the profits of which are chargeable to Income Tax.

Averaging is not available where, for example:

  • the trade is agricultural contracting since this trade does not involve the occupation of farm land (see BIM55055 onwards),
  • the trade includes substantial non-farming activities such as haulage or a caravan site as well as farming.