Commentary

B5.111 Compulsory slaughter—compensation and related grants

Business tax
Business tax | Commentary

B5.111 Compulsory slaughter—compensation and related grants

Business tax | Commentary

B5.111 Compulsory slaughter—compensation and related grants

Under the law relating to animal diseases, a farmer may occasionally be compelled to slaughter some or all of his animals (as, for example, where there has been an outbreak of foot-and-mouth disease or bovine spongiform encephalopathy (BSE)) by order of a government department or local or public authority under a disease control order. In such cases he is entitled to compensation. By concession before 1 March 2012 but now provided for by legislation for periods of account beginning on or after that date1, where this compensation is not payable in respect of animals forming part of a herd for which the herd basis election has been, or could be, made, the 'total compensation profit' may be excluded in computing the amount assessable to tax in respect of the basis period in which the slaughter took place. Such profits are instead included in three equal instalments in the assessable profits of each of the next three tax years2, or, in the case of a company chargeable to corporation tax, the profits may be spread over the three accounting periods following that in which the slaughter took place3. The provisions do not apply where profits are calculated on the cash basis for small businesses from 2013/14 (see B2.112)4.

The total compensation profit for a tax year or accounting period is the sum of the

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