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Indicator - FL Memo Ltd
Tel: (01233) 653500. Fax: (01233) 647100
customer.services@indicator-flm.co.uk
www.indicator-flm.co.uk
Calgarth House
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Registered in England
Company Registration No. 3599719
If you keep animals for production purposes, you might be able to take advantage of the “herd basis” to simplify calculating your taxable profits.
Production
Farm animals are treated as trading stock. For tax and accounting purposes these animals are more akin to capital assets than trading stock, and so it is possible to make a special election for them not to be treated as such.
Herd basis
Where a Herd Basis Election is made, a number of rules apply when calculating profits:
This last point is where a real tax saving can be made.
There is no special format for making an election, however it:
Once made, the herd basis will apply to all animals of the same class. A separate election is required for different classes of animal.
Time limit
You must make the election by no later than the statutory time limit. For a sole trader, this is the first anniversary of the normal self-assessment filing date for that tax year, so for 2023/24 it would be 31 January 2025. Once made, an election cannot be revoked, and applies to the class of animals it covers for however long they are kept.