BIM73110 - Farmers' averaging: who can claim

Any person carrying on a trade of farming or of market gardening (as defined in ICTA88/S832 (1) - see BIM55051 and BIM62601), the profits of which are chargeable to income tax, can make an averaging claim. Farms or market gardens outside the UK are not included.

ESC/A29

For this purpose, the intensive rearing of livestock or fish on a commercial basis for the production of food for human consumption is treated as farming by extra-statutory concession ESC/A29. Traders whose business consists of such activities may therefore claim averaging, whether or not they are assessed as farmers.

Averaging is thus available to:

• sole traders,
• partners (but excluding corporate partners) - (see BIM73175 onwards),
• executors, personal representatives and trustees,

who are carrying on a trade of farming or market gardening (as extended by extra-statutory concession ESC/A29), the profits of which are chargeable to income tax.

Averaging is not available where the trade is not farming or market gardening (as extended by extra-statutory concession ESC/A29). For example, averaging is not available where:

• 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.

Companies, including corporate partners, may not claim farmers' averaging nor may any other body which is chargeable to CT.