{
  "url": "https://openlegislation.uk/income-tax-trading-and-other-income-act-2005/section-221",
  "json_url": "https://openlegislation.uk/income-tax-trading-and-other-income-act-2005/section-221.json",
  "legislation": "ukpga/2005/5",
  "legislation_title": "Income Tax (Trading and Other Income) Act 2005",
  "legislation_url": "https://openlegislation.uk/income-tax-trading-and-other-income-act-2005",
  "path": "section/221",
  "kind": "section",
  "number": "221",
  "heading": "Claim for averaging of fluctuating profits",
  "text": "(1) This Chapter enables an individual (a “taxpayer”) to make a claim (an “averaging claim”) if—\n(a) the taxpayer is, or has been, carrying on a qualifying trade, profession or vocation (alone or in partnership), and\n(b) the taxpayer's profits from it (“the relevant profits”) fluctuate from one tax year to the next.\n(2) For the purposes of section 222 (two-year averaging) a trade, profession or vocation is a “qualifying trade, profession or vocation” if—\n(a) it is farming or market gardening in the United Kingdom,\n(b) it is the intensive rearing in the United Kingdom of livestock or fish on a commercial basis for the production of food for human consumption, or\n(c) the taxpayer's profits from it are derived wholly or mainly from creative works.\n(2A) For the purposes of section 222A (five-year averaging), a trade, profession or vocation is a “qualifying trade, profession or vocation” if it falls within subsection (2)(a) or (b).\n(3) For the purpose of subsection (2) “creative works” means—\n(a) literary, dramatic, musical or artistic works, or\n(b) designs,\ncreated by the taxpayer personally or, if the qualifying trade, profession or vocation is carried on in partnership, by one or more of the partners personally.\n(4) For the purposes of this Chapter references to the relevant profits of a tax year are to profits before making any deduction for a loss made in any tax year.\n(5) If the taxpayer makes a loss in the qualifying trade, profession or vocation in a tax year, the relevant profits of the tax year for the purposes of this Chapter are nil.\n(6) For the purposes of this Chapter references to the relevant profits of a tax year are to profits after any adjustment made under Chapter 16ZA (compensation for compulsory slaughter of animals).",
  "extent": "E+W+S+N.I.",
  "status": null,
  "version": "current",
  "annotations": [
    {
      "type": "F",
      "label": "F1",
      "text": "Words in s. 221(2) inserted (with effect in accordance with s. 25(12) of the amending Act) by Finance Act 2016 (c. 24), s. 25(2)(a)"
    },
    {
      "type": "F",
      "label": "F2",
      "text": "S. 221(2A) inserted (with effect in accordance with s. 25(12) of the amending Act) by Finance Act 2016 (c. 24), s. 25(2)(b)"
    },
    {
      "type": "F",
      "label": "F3",
      "text": "Words in s. 221(3) substituted (with effect in accordance with s. 25(12) of the amending Act) by Finance Act 2016 (c. 24), s. 25(2)(c)"
    },
    {
      "type": "F",
      "label": "F4",
      "text": "S. 221(6) inserted (1.3.2012) by The Enactment of Extra-Statutory Concessions Order 2012 (S.I. 2012/266), arts. 1, 7 (with art. 9)"
    }
  ],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/ukpga/2005/5/section/221",
    "retrieved_at": "2026-10-29T09:16:32.370392+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}