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

HMRC internal manual

VAT Taxable Person Manual

From
HM Revenue & Customs
Updated
, see all updates

Particular trades: Share farming and the husbandry of crops: The problem

Landowners often reach agreements with agricultural contractors or merchants relating to the cultivation and cropping of land. These agreements fall into three broad categories:

  • agreements where the landowner grants the contractor or merchant a right over land or a licence to occupy land for the purpose of growing a crop;
  • agreements where the landowner engages a contractor to supply husbandry services;
  • share farming and joint ventures.

Problems can arise both in identifying who has made the final supply of the crop, and in determining whether supplies have taken place between the parties prior to that time. To answer these questions, you must identify which type of agreement applies in your case. This involves studying the contracts between the landowner and the agricultural contractor or merchant. This section lists a series of questions which you should ask when examining the contract and explains the accounting consequences which will follow your decision.