Valuation base remains 60%
THE Inland Revenue has decided to maintain the "deemed cost of production" system for year-end valuations of cattle that are not assessed on the herd basis.
In discussion with the Central Association of Agricultural Valuers, it has agreed that values should still be based on 60% of market value.
For values between Mar 20 and May 31, this can be based either on any compensation later paid, weight adjusted to the year-end; or on the pre-crisis value less 30% for cull cows, 40% for bull calves and 20% for beef cattle.
Farmers faced with more than 20% compulsory slaughter can switch to the herd basis valuation system if they have not already.
The position is further complicated by the current switch to self- assessment for tax, linked to current year accounting. However, the Inland Revenue suggests that in many cases this could work in farmers favour, because the need to value stock at the end of March 1996 can be avoided by covering the whole of the self assessment transition period. This would not be possible if the farmer was declaring a loss for the year ended March 1996. *