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Chapter DMBM585140

Document Cited in Related
Vincent
Published date29 April 2016
Record NumberDMBM585140
CourtHM Revenue & Customs
IssuerHM Revenue & Customs

Individuals and partnerships (but not companies) carrying on a trade of farming or market gardening may choose for tax purposes to average the profits made in any two consecutive years. They exercise this choice by what is known as an `averaging claim`. They do not have to be assessed as farmers, but the business must consist of the intensive rearing of livestock on a commercial basis, for the production of food for human consumption.

Time limits for making a claim

An averaging claim should be made not later than -

  • two years after the end of the second year of assessment to which it relates, for pairs of years up to 1995-96 and 1996-97
  • 22 months after the end of the second year of assessment, for pairs of years 1996-97 and 1997-98 onwards.

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Schedule D cases

In a schedule D case, if an averaging claim is made after an appeal has been determined, the assessing office may still stand over part of the tax, making it appear that the collectible tax is a non-postponed amount.

If we were to take court proceedings for the ‘NPA’ it would preclude proceedings to recover any further amount that became due on settlement of the averaging claim. Before you start enforcement proceedings for what appears...

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