The southern steer price is 103p/kg down on the year, but January's payment on account uses the peak year

Reacting to: Irish cattle prices under pressure as GB gap widens (Agriland, 7 September 2026) →

Agriland has reported new AHDB analysis on where the beef trade has got to. The steer differential between Great Britain and Ireland reached 66p/kg in the final week of August. AHDB's Sebastian Abbott puts the Irish steer price at 551p/kg for the week commencing 24 August 2026, down 103p/kg on the year from 654p/kg, against a peak of 664p/kg in March 2025.

If you finish cattle in Northern Ireland, that second figure is the one that decides your year. And here is the awkward part of the timing. The peak was March 2025 — inside the 2025-26 tax year. The fall is happening now, inside 2026-27. The payment on account you make on 31 January 2027 is calculated on the year the price was at its best, whatever the year you are actually having. If you leave it unchanged, you pay HMRC more than this year's profit requires, while prices are falling. You can apply to reduce it.

What the AHDB figures say

The analysis covers Ireland and Great Britain. On supply, Irish prime cattle slaughter for 2026 to the end of the week commencing 24 August totalled 802,000 head, down 4% year on year, with cow slaughter back further at 226,000 head, down 6%. Abbott attributes the recent price pressure to a short-term supply recovery, and points to a record-dry summer — Ireland recorded its driest July on record at 17% of average rainfall, against 10% across England — which has raised real questions about winter fodder.

On weights, prime carcase weights grew across all categories in the first half of 2026, with steers up 21kg and heifers up 15kg on average versus last year, which AHDB says is "somewhat negating" the effect of lower throughput. On trade, Irish total beef exports fell 10.4% in the first half of 2026, with exports to the UK down 10.5%, while Irish beef imports rose 20.2%. Abbott's read is that Irish prices have fallen faster than GB since December 2025, as Irish exports met southern hemisphere competition and softer consumer demand.

Why southern prices affect Northern Ireland farms

Northern Ireland is the only part of the United Kingdom where a beef farmer routinely has a live choice of two markets. Cattle go north to local plants or south across the border, southern buyers are a real presence in the marts, and the exchange rate and the two price series are watched weekly by people who are not economists. Nowhere in England, Scotland or Wales does that decision get made at all.

So a 66p/kg gap in GB's favour is not an abstraction here — it changes the direction of travel. When the southern price falls faster, southern buyers step back at the ringside, and the farm that sold south last year is looking at a different set of options this year. Your own price comes from your own kill sheets, because the AHDB series covers Ireland and GB and does not quote Northern Ireland prices. It shows how prices moved over the year, and your tax bill follows that movement.

An illustration: 90 finished steers off a Co. Armagh farm

Built from published figures and published tax rules. The farm's own numbers are its own. Take a sole trade beef enterprise outside Markethill, accounts made up to 31 March, finishing 90 steers a year at 380kg deadweight and selling into a southern plant.

Apply the year-on-year fall AHDB reports in the Irish steer price. 103p/kg across a 380kg carcase is £391.40 a head. Across 90 head that is £35,226 off the year's output — before a single cost has changed. Suppose that takes the farm's taxable profit from £62,000 in 2025-26 to £27,000 in 2026-27.

Northern Ireland farmers pay UK income tax rates — the devolved bands apply in Scotland only. For 2026-27 the personal allowance is £12,570, basic rate is 20% to £50,270 and higher rate is 40% above it, and Class 4 National Insurance is 6% between £12,570 and £50,270 and 2% above.

The January payment on account

Payments on account are each half of the tax you owed last year, due 31 January and 31 July. On the 2025-26 liability of £14,729, that is £7,364 on 31 January 2027 and another £7,364 on 31 July 2027. Against an actual 2026-27 liability of £3,752, the farm has handed HMRC £10,977 it does not owe and will not see back until the 2026-27 return is filed and processed.

You do not have to do that. Where you know the year is going to be smaller, you can ask HMRC to reduce your payments on account, online through your Self Assessment account or on form SA303. The number you give is your expected profit for the year, so it wants to be a number you can stand behind — a set of management accounts to the end of December rather than a hope. Get it wrong on the low side and HMRC charges late payment interest at 7.75% on the difference. Leave it alone and the money sits with HMRC earning repayment interest at 2.75%. Both rates have applied since 9 January 2026. On roughly £11,000 held for a year, the difference is five points of interest.

Averaging claims and the cash basis

A collapse from a peak year is precisely what farmers' averaging exists for. HMRC's helpsheet HS224, updated 6 April 2026, lets farmers add together their profits over two years or five and be taxed on the average. For a two-year claim the difference between the two years must be more than 25% of the profit of the better year. Here the difference is £35,000 and 25% of £62,000 is £15,500, so the claim is available.

£1,877 from a claim rather than a transaction. The saving is the higher-rate tax and 2% National Insurance stripped out of the peak year, so it grows the further the good year ran into the higher rate and shrinks to nothing if both years sit in the basic rate throughout. Sole traders claim in box 72 of the Self-employment (full) pages; partners claim in box 11 of the Partnership pages, and a partner can claim even if the other partners do not.

Now the trap. HS224 says it in one line: you cannot claim averaging if you have used the cash basis to calculate your profits. The cash basis has been the default for unincorporated businesses since 6 April 2024, which means a farm can be sitting on it without anyone ever having chosen it. On the cash basis there is no averaging claim to make in a year like this one, and no herd basis election behind it either. Which basis your accounts are prepared on is a one-line question to your accountant. Ask it before the year end.

What to do this week

Get management accounts to 31 December in front of somebody. Not the year-end accounts — a working profit figure for the current year, good enough to support a reduction claim before the 31 January deadline. That is the whole basis of the SA303 number, and it is what our management accounts and cashflow work is for.

Ask which basis your accounts are on, in writing. Cash or accruals, for the current year. If the answer is cash and you are a farming business with volatile output, talk to your accountant now, because the cash basis rules out the averaging claim.

What is still uncertain, and when we will know

Three things are genuinely open. Whether the gap keeps widening: AHDB's own outlook is that forecasts indicate a more normal seasonal supply pattern in the second half of 2026 relative to the exceptionally low levels of autumn 2025, which Abbott says may continue to weigh on prices — that gives a direction and no more; the weekly series is what settles it. Whether the dry summer turns into a fodder cost as well as a price problem: that shows up in feed invoices over the winter, and it lands in the same accounting year as the lower output. And what any of it does to your own returns, which will not be visible until the year-end accounts are prepared.

What is not uncertain is the tax position, and that is the part you control. The January payment is calculated on a year you have already had; whether you pay it in full is a decision you can make. If you farm here and want the payment on account, the averaging claim and the basis of accounting looked at together, our Northern Ireland team does this from the office in Ballymena, and the farm accounts guide covers the stock and scheme income side in full.