Quick answer
Farmers who claimed averaging relief on their 2024/25 return are exempt from MTD until April 2027. Otherwise the normal rules apply: your gross farm turnover plus any rental income counts towards the threshold, and most farms with sales over £50,000 started in April 2026.
Key facts
Claimed averaging relief on your 2024/25 return: exempt until April 2027
Gross farm sales count, before feed, fuel and other costs
Farmers can average profits over 2 or 5 years
Farms run as partnerships aren’t in MTD yet
Averaging and the exemption
Averaging lets farmers and market gardeners even out tax over 2 or 5 years when profits swing. HMRC lists claiming averaging relief on your 2024/25 return as a temporary exemption until April 2027. HMRC also says the exemption ends before 2027/28 if your qualifying income is over £30,000 in 2025/26.
Farm turnover and the threshold
Qualifying income uses gross sales: livestock, crops, milk and contracting work, plus rent from let cottages or land. Arable and livestock farms can pass £50,000 of turnover with very thin profit.
Start date | Qualifying income over | Based on your tax return for |
|---|---|---|
6 April 2026 | £50,000 | 2024/25 |
6 April 2027 | £30,000 | 2025/26 |
6 April 2028 | £20,000 | 2026/27 |
Partnerships
Many farms are run as family partnerships. Partnerships aren’t yet required to use MTD, and your share of partnership profit doesn’t count towards your threshold. See MTD and partnerships.
Getting ready
Check whether your software handles averaging claims
Separate farm and household spending
Record machinery purchases for capital allowances
Keep rent from let property separate from farm income