Written by Charlotte Cunningham
Farmers should carefully budget their cash flow over the coming 12 months, to avoid risky pinch points at a time of great uncertainty, according to rural accountant Old Mill. Charlotte Cunningham reports. Even in a normal year, cash is king, but with the combined concerns of Brexit, trade deals, and COVID-19, budgeting is more important than ever, says Phil Kirkpatrick, rural accountant at Old Mill. “Though agriculture has largely been unaffected directly by COVID-19, knock-on effects including increased costs, limited sales and redundant diversification means farmers should plan now for the coming tax bills.” With this in mind, there are a number of important dates to plan for. 1 Oct 2020 / 1 Jan 2021 Limited companies with a Dec year end are due to pay Corporation Tax on 1 Oct, while those with Mar year ends will have until 1 Jan. The COVID-19 crisis did not begin until after Dec, and was only just taking hold in Mar, so profits for last year were probably higher than at present, leading to correspondingly larger tax bills. “However, since then, a combination of higher costs and reduced income may have depleted the cash generated, leaving little left over to pay tax,”…
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