Farmers’ losses

There is a restriction which prevents relief for farming losses being claimed against other income if a loss results for tax purposes for more than five years in a row.

What is sometimes forgotten is that irrespective of the accounting date the loss has to be calculated on a fiscal year basis to see if the restriction will apply. So even if a profit is shown on an accounts year basis there might still be a fiscal year loss – and this point is taken by HMRC!