Fertiliser Price Tracker

Steevo · Dec 6, 2021

Fubar said:
Bought my N early for £278(smug smiley face). If its worth £600 odd at my year end in March do I have to value it at that?
If so does it means I will be taxed on the gain on a product that I am not going to sell.
How does that work?

If you don’t intend to sell it, it’s value to you/your business is what you paid for it.

Stock is always valued at the lower of cost or market value to be conservative or else you face exactly the problem you mention.

So it’s valued at £278 in your stock, because that’s what you paid for it. But the produce you then sell from using it for production will likely benefit from a higher resale value, and you’ll pay tax based on this realised profit after you have sold it.

@farmerdan7618 will probably be able to explain better.

Bossfarmer · Dec 6, 2021

Fubar said:
Bought my N early for £278(smug smiley face). If its worth £600 odd at my year end in March do I have to value it at that?
If so does it means I will be taxed on the gain on a product that I am not going to sell.
How does that work?

Supposing you did youd prob be valuing your crop in the ground at £50/t higher than last year so that would balance it out

neilo · Dec 6, 2021

Fubar said:
Bought my N early for £278(smug smiley face). If its worth £600 odd at my year end in March do I have to value it at that?
If so does it means I will be taxed on the gain on a product that I am not going to sell.
How does that work?

Bought in stores are generally valued 'at cost', which reflects the money that has already gone out of the business.

Bossfarmer · Dec 6, 2021

neilo said:
Bought in stores are generally valued 'at cost', which reflects the money that has already gone out of the business.

And how would you value a crop in the ground for tax purposes? At cost of establishment or market value?

Flat 10 · Dec 6, 2021

Bossfarmer said:
And how would you value a crop in the ground for tax purposes? At cost of establishment or market value?

establishment ie seed, fert, sprays, cultivations

teslacoils · Dec 6, 2021

Bossfarmer said:
And how would you value a crop in the ground for tax purposes? At cost of establishment or market value?

What an incommer would pay for it. Work, seed, fert, beneficial sprays, etc.

neilo · Dec 6, 2021

Bossfarmer said:
And how would you value a crop in the ground for tax purposes? At cost of establishment or market value?

I'm pretty sure you can do either? 60% of market value maybe, as opposed to 75% for livestock?

Cost of establishment is usually lower though I suspect.

Bossfarmer · Dec 6, 2021

teslacoils said:
What an incommer would pay for it. Work, seed, fert, beneficial sprays, etc.

so automatically that would go up because of the fert and partially balance out the high fert cost

yellow belly · Dec 6, 2021

Bossfarmer said:
And how would you value a crop in the ground for tax purposes? At cost of establishment or market value?

Cost of establishment

farmerdan7618 · Dec 6, 2021

Steevo said:
If you don’t intend to sell it, it’s value to you/your business is what you paid for it.

Stock is always valued at the lower of cost or market value to be conservative or else you face exactly the problem you mention.

So it’s valued at £278 in your stock, because that’s what you paid for it. But the produce you then sell from using it for production will likely benefit from a higher resale value, and you’ll pay tax based on this realised profit after you have sold it.

@farmerdan7618 will probably be able to explain better.

As @Steevo says, lower of cost or value is what goes into the stock value for year end and tax purposes.

Little example for illustration, fert bought at £278/t and market at £600/t and the year end value is £278/t

Fert bought at £278/t and market at £200/t and the year end value is £200/t.

You should never be paying tax on what you have in stock, as your costs will offset against the stock value. Profits are made when things are sold, and are taxed at that point.

farmerdan7618 · Dec 6, 2021

Bossfarmer said:
And how would you value a crop in the ground for tax purposes? At cost of establishment or market value?

Cost of establishment, unless the value is lower than this.

ollie989898 · Dec 6, 2021

farmerdan7618 said:
As @Steevo says, lower of cost or value is what goes into the stock value for year end and tax purposes.

Little example for illustration, fert bought at £278/t and market at £600/t and the year end value is £278/t

Fert bought at £278/t and market at £200/t and the year end value is £200/t.

You should never be paying tax on what you have in stock, as your costs will offset against the stock value. Profits are made when things are sold, and are taxed at that point.

Makes total sense, when you consider the cost of fertiliser what you were invoiced for and a known value, whereas the value tomorrow could be anything and so totally unknown.

Werzle · Dec 6, 2021

Sometimes end of tax year valuations are more about what picture you are trying to paint for your bank manager!

Steevo · Dec 6, 2021

ollie989898 said:
Makes total sense, when you consider the cost of fertiliser what you were invoiced for and a known value, whereas the value tomorrow could be anything and so totally unknown.

Exactly. All that really matters is price you buy and price you sell. Those relate to taxable transactions. Anything in the middle is just a rollercoaster of ups and downs and it’s value on any day is really irrelevant in the grand scheme of things.

JCfarmer · Dec 8, 2021

Urea around £750t
Nitram £625

WildSussex · Dec 8, 2021

JCfarmer said:
Urea around £750t
Nitram £625

Where's that from then?

Bramble · Dec 8, 2021

WildSussex said:
Where's that from then?

Frontier have stuff at those prices, Nitram price for Jan only limited availability

marco · Dec 8, 2021

Bossfarmer said:
And how would you value a crop in the ground for tax purposes? At cost of establishment or market value?

Cost to you, seed,diesel, depreciation on machinery etc. Why would you value a crop that may get flooded freeze killed etc?

Chae1 · Dec 8, 2021

Bramble said:
Frontier have stuff at those prices, Nitram price for Jan only limited availability

I got offered at same price today. No word of limited availability.....

bobk · Dec 8, 2021

Chae1 said:
I got offered at same price today. No word of limited availability.....

I would imagine they haven't sold a lot since september when the price went from expensive to effin ridiculous

Fertiliser Price Tracker

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100% I’ve had enough of farming!

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