There have been significant advancements in technology within the farming industry in the past decade. The aims of these technological advances have typically been to improve productivity and profitability of the farming process. (more…)
Farmers across the UK have begun to look towards diversifying their existing traditional farming businesses to increase profitability and reduce dependence on one source of income in an attempt to future proof their businesses.
Over the years, diversification options have become more widely known with coverage of the use of excess or poorer quality land for glamping campsites, conversion of barns into farm shops for selling own or local produce and even the establishment of farm parks. (more…)
Across most parts of the country, it has been a miserable spring. As we come into the key growing season there has been about 20% less sunshine than usual and well over 20% more rain – not to mention unseasonably late snow, frost, hail and gales. Spring cultivations in parts of the UK are up to a month late and even if crops can be drilled there will probably be a shorter growing season and lower yields. There is even talk of some land destined for root crops simply remaining fallow.
All of this means that cash flow is likely to come under pressure and forecasts which looked sensible six months ago may now need revision. So what can you do on the next wet day to increase your profitability? (more…)
The annual government report on agriculture has recently been issued. At 110 pages it is not easy reading, but it certainly sheds light on an industry which we, as accountants, normally only observe on a piecemeal basis. (more…)
Running a Bed & Breakfast business from your farmhouse can introduce some diversified income into the family and make use of some unused bedrooms. Such an enterprise can also be tax-efficient. A farmhouse Bed & Breakfast business qualifies for the rent-a-room allowance, which has increased to £7,500 per annum from 6 April 2016. The allowance is halved if you share the income with your partner or someone else.
If you earn less than the threshold from your Bed & Breakfast lettings, the tax exemption is automatic and you do not need to do anything. (more…)
A challenge in the agriculture sector has always been fluctuating profits with reasons including the weather or other challenges such as movement restrictions as a result of foot and mouth. Farmers who make losses are able to relieve those losses against other income, called “sideways loss relief”. However, HMRC will not permit indefinite relief of losses in this way and consider a fixed number of consecutive years for which losses can be relieved, with 5 years being the period set out in the legislation.
The basic criteria to qualify as R&D relies on the project seeking to achieve a scientific or technological advance while attempting to overcome scientific or technological uncertainty. Qualifying R&D must also be:
With commodity prices fluctuating wildly in recent years, profits (and hence tax liabilities) can also fluctuate from one year to the next. Given the HMRC payment on account system, this can mean that your tax bill is higher than necessary.
Payments on account are calculated as 50% of the prior year’s tax bill, with one payment due by 31 January of the tax year, and the other payment due by 31 July after the end of the tax year. If your income levels remain the same as the previous year, payments on account effectively spread the cost of your tax bill into two instalments over the year. Of course this also means that HMRC get your money earlier!
The new rules are far more generous than many thought would be the case and offer some new planning opportunities.
Under the new rules, the key factor is the age at which a member dies.
At first glance Philip Hammond’s first Autumn Statement seemed remarkably short on announcements. The most important news was probably that this would be the last Autumn Statement in this form, and in future we will see a Spring Statement and an Autumn Budget. This change will at least reduce the current trend of giving good news to take effect years into the future and then repeating it at six monthly intervals, whilst letting the bad news slip out in the small print and then stealthily take effect without further publicity. (more…)