To carry out a quick review of an averaging claim, check that:
- The trade, profession or vocation is a qualifying one (see BIM84050).
- Where the trade is farming, market gardening or intensive rearing of livestock or fish, it is carried on in the UK (see BIM84050).
- The claimant is not a company (see BIM84050).
The claim was made not later than:
- the normal time limit (broadly, 22 months after the end of the second tax year (see BIM83155)),
- or, exceptionally, under the extended time limit for further claims, see BIM84150.
Averaging claims are made in the return of the later year by including an averaging claim tax adjustment in that return.
- The claim covers two consecutive tax years (see BIM84115).
Neither of those years:
- is the year of commencement of the trade,
- is the year of cessation of the trade,
- precedes a year which has already been included in an averaging claim,
- (where the profits are derived wholly or mainly from creative works) is the year the trade etc. first becomes qualifying or ceases to qualify (see BIM84115).
- The profits dealt with by the claim are the trade profits after capital allowances and balancing charges (see BIM84120).
Of the two profit figures, the lower figure: