Do farmers have to make profit once every 7 years?
Comments
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There's a few comments to the article in the attachment that gives a bit more information but first I have heard of it!
http://www.accountingweb.co.uk/anyanswers/question/what-business-vat-purposes
Couldn't find anything on HMRC though...0 -
Never heard of that one? I've been doing farm accounts for 10 years but then I've never had a continuous run of losses so not been an issue0
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What happens if they don't
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I've done farming accounts for a while and had to recap myself (as most farmers do make a profit now and again) but here goes.
Losses (before CA's) occuring in a 6th consecutive year cannot be offset against other income for that year. They are restricted to only be used for future profits occuring from the same trade.
If you can demonstrate that there is a reasonable expectation of profits in the future than you can get around it but proof may be difficult.
Once 1 year makes a profit then the 6 years start again.Regards,
Burg0 -
Many thanks all. It's the first time ive used the forum, very useful.0
