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HMRC internal manual

Business Income Manual

Averaging: farmers

S221 Income Tax (Trading and Other Income) Act 2005

Averaging is 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 of fish or livestock for human consumption, the profits of which are chargeable to Income Tax.

Farms or market gardens outside the UK are not included.

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.