Personal Tax- Period Reform 2024: Farmers Averaging combining two periods incorrectly

personal-tax-period-reform-2024-farmers-averaging-combining-two-periods-incorrectly

Personal Tax- Period Reform 2024: Farmers Averaging combining two periods incorrectly

22nd August 2024

IRIS Personal Tax- Period Reform 2024: Farmers Averaging combining two periods

The Farmers Averaging under the Period Reform 2024 is incorrectly combining the total figures for two accounting periods in the calculation for the same tax year.

For Example:

Accounting Period: 30/04/2023 – Profit £50,000

Accounting Period: 05/04/2024 – Profit £20,000

However it shows as: £50,0000 + £20,000 = £70,000. They are expecting Farmers Averaging calculation to be based on £50,000.

This has been confirmed as a DEFECT on 24.2.0 and this is planned to be fixed on the Autumn update 24.3.0 week commencing 30th Sept 2024.

There is also a workaround below:-

1. In the Sole trade section go to the Adjustments, Losses, Overlap and Tax tab
2. Go to the row “Adjustment for farmers’ or creative averaging” and untick the box to use IRIS figures
3. Enter the expected amount within the field
4. Go to Reliefs | Miscellaneous | Tax Calculation | Tax Code and Overpaid, Underpaid and Repaid Tax
5. Enter the Tax Adjustment with “Tax underpaid(-ve)/Overpaid(+ve) from earlier years field 

Our apologies for any inconvenience.