Averaging profits: rules for farming and market gardening

Taxation

Because of the fluctuating nature of profits of farming and market gardening, an election may be made by an individual, but not a company, carrying on either trade in the United Kingdom, to average profits for income tax purposes over two or five consecutive years of assessment. (Note that this includes a trade which consists of the intensive rearing of livestock or fish to provide food for human consumption). This Business Guide document outlines the rules applying to averaging of profits.