I assume with the principle of farmer averaging HMRC adjust the tax liability of previous years with the current year based on averaged.
Considering a simple farmer averaging over 2years.
Actual profits show £25k; then£45k. Meets the elibibilty criteria.
I assume HMRC will increase the tax liabilbity of the first year to match the Averaged Profit and reduce the current one.
This will mean manual calculations to compare the best outcome.
Is it really that straightforward or am I missing something?