Farming income and expenses

Produced by a Tolley Owner-Managed Businesses expert

Owner-Managed Businesses

Guidance

This guidance note summarises the main tax considerations when looking at how farmers calculate their profit or losses including the treatment of income from Government schemes.

The meaning of farming and market gardening is set out in the Definition of farming trade guidance note which also includes descriptions of the types of activities which would be considered as being within the farming trade.

Farming income

‘Farming profits’ are the profits generated by the care of livestock, growing of crops and associated income from farming related grants received. It excludes non-farming income from the rental of land, buildings, equipment or non-farming investment income from company dividends, interest or similar receipts.

The receipt of grants and subsidies in farming is common and the receipts are treated for tax purposes in the same way as in any other business. It is necessary to establish if the grant or subsidy is a revenue or capital receipt which is determined by the purpose for which the grant was paid. This is usually set out in the grant documentation. A grant which subsidises

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

TAKE A FREE TRIAL

Popular Articles

Trusts and Inheritance Tax

Spouse exemption from inheritance tax

Spouse exemption from inheritance taxArguably, the most important inheritance tax exemption is the spouse exemption from inheritance tax.There is no IHT to pay on gifts from husband to wife and vice versa, or from one civil partner to the other (referred to collectively in this note as ‘spouses’).

14 Jul 2020 13:56 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more

Owner-Managed Businesses

Repairs and renewals

Repairs and renewalsThe key consideration in determining whether expenditure on repairs and renewals is allowable as a deduction for tax purposes is whether it is capital or revenue in nature. In some cases, it can be relatively straightforward to identify revenue repairs. HMRC provides the

14 Jul 2020 13:23 | Produced by Tolley Read more

Employment Tax

Subsistence expenses

Subsistence expensesIntroductionSubsistence is the amount incurred as a consequence of business travel. Typically it relates to accommodation and meal costs incurred. These amounts are allowed because they are associated with the necessary travel which is not to a permanent workplace. See the Travel

14 Jul 2020 13:43 | Produced by Tolley in association with Philip Rutherford Read more

UU��ֱ��