Commentary

B5.105 Farming profits—general

Business tax
Business tax | Commentary

B5.105 Farming profits—general

Business tax | Commentary

Computation of farming and market gardening profits

B5.105 Farming profits—general

Assessed as a trade

The profits from farming and market gardening are within the scope of income or corporation tax. Specifically both activities are treated as the carrying on of a trade1; this is the case irrespective of whether there is any commercial motivation. An example of this is breeding horses as a hobby; HMRC usually treat this as farming and therefore carrying on a trade, even though the badges of trade may on balance point to no trade existing2.

The ordinary rules for computing trade profits therefore apply to farming and market gardening. For commentary on the treatment of various farming receipts and expenses, see B5.106 and B5.107 respectively. For

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