Do you all just pay the Tax?

[Lincsman]

With a lot of pensions you just swap paying tax to paying commission imvho.
Far better to invest in your own business, as long as it's long term not shiny metal, unless it makes enough to pay for itself, sure you save some tax, especially if paying the higher rate but unless you live to enjoy a long retirement a lot of what you saved up.is kept by the companies when you die, we have invested in small industrial units that give a good return now and into the future and will be passed on to the next generation .
In my view too many are obsessed with avoiding tax rather than looking longer term

Not At all, if you are in 40% band with some tax, just moving that has earned you 40% interest in the time it took to log in, once there you can do nothing if you want, or buy blue chip shares and then do nothing, any costs are never going to get close to that 40% interest earned the first day.. ( 20% if in lower rate band)

Then when you are 55 or older you can get out 25% of the fund tax free, (if you dont plan it to take any more you can add some more and save tax, but beware of "recycling rules"!)

I took out 25% and bought another house to let.. its paper value alone has gone up 20% this year.

 

[Farma Parma]

I've heard the saying that it's better to have an overdraft than pay tax. In my experience, not sure that's good advice...

ive had that told too me aswell.
Made my own judgement in the years since & got neither now.

 

[nelson]

ive had that told too me aswell.
Made my own judgement in the years since & got neither now.

you would have to have lot of money borrowed to stop much tax one mil at 2% want stop much

 

[Farma Parma]

you would have to have lot of money borrowed to stop much tax one mil at 2% want stop much

Just aswell being a tenant rather restricts ya borrowing unless you have other assets
you do learn to tighten ya belt & go canny the hard way.
Seen plenty own there places & quite a few long since out of business & they had it all on a plate

 

[Old Tup]

I would like to know how some farmers are able to go and buy 200 acres or more to add onto 700 to a 1000 acres of owned land and not have rollover money avaliable.

1000 acres owned …..no borrowed money ….well farmed…..I would suggest that after a few good years you would be actively looking to buy land especially if adjacent…
Paying interest is a much more attractive proposition than paying Tax.

 

[toquark]

Using borrowings as leverage against tax is fine but I bet there are plenty who are lured in by the thought of more acres and less tax only to come unstuck when the reality of servicing the debt and the associated issues with cash flow that raises.

 

[Steevo]

Not to mention then having to farm those extra acres too - more machinery to upgrade, greater cashflow demand for seed/fert, more labour etc.

Oh, and then after all that hoping to make a profit on farming those too....!

Maybe we're onto something - farm a few more acres, make a loss on those extra acres, and then you've managed to save yourself paying tax!

 

[kiwi pom]

i dont agree with that. farmers are price takers, as they have spent a year producing a product and then have a finite time to sell it, so they take whatever they can get. i do see the basic point you are making though, all business needs to be competitive or they will fail, that is not the same as price taking though.

the difference is that our input costs are not always connected to the prices we receive, whereas generally in business a higher cost of producing a good or service will increase the market value

They don't have to be price takers though, they could produce on contract or for a specific customer if they really wanted. UK farmers don't seem to like that though so there's always chancers producing hoping the price is high when they come to sell.

 

[dave mountain]

They don't have to be price takers though, they could produce on contract or for a specific customer if they really wanted. UK farmers don't seem to like that though so there's always chancers producing hoping the price is high when they come to sell.

gonna start sticking a picture of an apple on the side of my lambs and selling iSheep. only £1999 each.

 

[Highland Mule]

gonna start sticking a picture of an apple on the side of my lambs and selling iSheep. only £1999 each.

If you think that’s a marketing strategy with legs, go for it. Others have a less plagiaristic brand and manage to better the commodity price, some of us even have a waiting list.

 

[Old Tup]

Using borrowings as leverage against tax is fine but I bet there are plenty who are lured in by the thought of more acres and less tax only to come unstuck when the reality of servicing the debt and the associated issues with cash flow that raises.

1000 acres buying 200……not really.
True enough a proportion should never have been near it…..
But plenty of others turning good pretty consistent profits on the back of owned land with no borrowings.

 

[smallholder99]

the tax that big companies avoid paying works out at over half a million per mp per day, think of the area your local constituency ,its hard to believe theyre so much money out of the public ,and we re doing all the work

 

[Chae1]

I've heard the saying that it's better to have an overdraft than pay tax. In my experience, not sure that's good advice...

Not sure what they mean?

Have a 6 figure overdraft and it doesn't reduce tax we pay as far as I'm aware.

 

[Sheepykid]

Not sure what they mean?

Have a 6 figure overdraft and it doesn't reduce tax we pay as far as I'm aware.

I’m not 100% sure but my interpretation of that saying is it meaning possibly two things. Firstly using a overdraft allows you in theory to purchase things to reduce your tax bill that otherwise you might not of had the resources to do. My guess would be stock that is then written down at a lesser value in the end of year stock take to create artificial losses. Eventually that’ll catch up with you though. The other is if your into a big overdraft and operating on someone else’s money but possibly keeping your own cash for other investments. The interest on the overdraft is tax deductible. So if you have a £10k bill for interest you’d really only be paying £6k to use it if your a higher rate tax payer. Assuming you are solvent and are better deploying your own money.
I might be talking rubbish though.

 

[dave mountain]

If you think that’s a marketing strategy with legs, go for it. Others have a less plagiaristic brand and manage to better the commodity price, some of us even have a waiting list.

thats the genius, my iSheep will have 4 legs of lamb as opposed to the normal 2. because its an Apple iSheep everyone will ignore the fact that there is no meat on half of them, just as they ignore the massive lack of spec on apple electronics

 

[Ceri]

Pay the tax
There's only one thing worse than paying tax and that's not having to pay any tax

 

[Enry]

Just a little dampener on pensions: Like AIA, they're a form of tax deferment. I will be more than a bit peeved if I find I've saved 20% tax today, only to pay 25 in the future. I put a bit in an isa as well, Rishi has already had his cut, but what it amounts to will all be mine.

There is the pension tax-free lump sum, which is the carrot to take the gamble.

I had this discussion with my accountant…pension tax relief is seen as some kind gov gesture….in reality, they are letting you invest more on the basis that it will grow and they can then tax the drawings….i.e. £100k in with tax relief, turns into £200k less up to 25% tax free lump sum so £150k to tax at whatever the rate is then. If I bet on a horse I can pay the tax on the stake and have tax free winnings whereas that is not an option with the pension!!

 

[farmerdan7618]

There are two ways to ensure you never pay any tax in farming. One is to not make any profit, and the other is to spend any profit you make on things like machinery. Neither is a great place to be.

I spend my time talking about tax, amongst other things, with my clients and there is a broad spectrum of attitudes to tax, those who are the least concerned about tax are generally the most profitable.

My job is to make sure clients pay the right amount of tax for the profits they make, ensuring all reliefs they are eligible for are claimed. And to give advice on how to achieve their goals in the most tax efficient way, but the goal needs to come first.

Plenty of options to keep tax down, timing of repairs and investment in kit, pensions and what they can be used to buy, research and development tax credits, farmers averaging, business structure. Communication is key, and as an accountant, I can give better advice if I know what is going to happen, rather than what has happened.

 

[Barleymow]

I've heard the saying that it's better to have an overdraft than pay tax. In my experience, not sure that's good advice...

What about doing both

 

[bluebell]

the sad fact of life is, the richer you are the less tax you pay? the very rich, say celebrities like lineker and clarkson, why do you think they have off shore companies in jersey isle of man? then the super rich like philip green why do you think they recide in monico ? Not illegal, but when you are earning these vast sums, the tax advice you get , you get the top advice is in a deferent league? its us lot in the middle the many many tens of thousands of smallbusinesses were the tax burden is? With the very recent revolution in shopping from the likes of amazon and other global businesses that have destroyed many many small businesses in a short time, these large players such as amazon can play the legal tax avoidance card that us small businesses cant? thus any govt has to change this because the amount of tax being lost on sales in the UK is big big big? in propprtion to what we pay? level playing field, getting steeper by the day?