Income Tax (Trading and Other Income) Act 2005 section 224

Effect of adjustment

Section 224 explains what happens once profits have been adjusted following a successful averaging claim by a farmer or creative artist, and how this interacts with other income tax reliefs and time limits.

• Once an averaging claim is accepted, the adjusted profit figures replace the original figures for all income tax purposes, including any future averaging calculations.
• If the relevant profits for one of the tax years covered by the claim are nil, the taxpayer can still claim loss relief under the Income Tax Acts for that year or any other tax year — averaging does not block this.
• Any other income tax relief claim relating to the tax years covered by the averaging claim is not out of time provided it is made on or before the last date on which the averaging claim itself could have been made; and if already made, it may be amended or withdrawn by that same date.
• For the purpose of these extended time limits, "claim" includes an election or notice, and where the other claim was made within a tax return, amending or withdrawing it means amending the return accordingly.