TAX !

[robs1]

Too many spend money on stuff they dont need to avoid tax, this often involves borrowing money as the cash isn't always available if it's done via a three or four year deal from the manufacturer you save tax the first year but have to pay more the following years to cover the repayments.
I would rather pay tax than lots of interest, with the uncertainty of the world currently if profits disappear there will be no tax but interest will continue and may rocket.

 

[B R C]

Inheritance tax

Run the contacting as a ltd company, separate from farm partnership, best of both worlds.

 

[Green oak]

buying land does not stop tax. buying machinery stops tax in the year of purchase then the tax man claws it back over the next 5 -10 -15 years depending how long you keep it through depreciation so the tax is just deferred

That’s the trouble. Stops tax in the year of purchase. But I’d like it too see a tax benefit over the financial term. Takes years to pay Machines of nowadays.

 

[lazy farmer]

We have a Limited company in the partnership and move the profits about accordingly

 

[smallholder99]

ask boots the chemist how they do it, avoiding tax on a billion of profit, im suprised how people in business and paying tax aernt more annoyed by multi nationals and govts that let it happen

 

[z.man]

Are your older partners drawing a pension and did any/all claim covid business interruption money as you had to give a 1/3 of it back in your tax return this year

 

[livestock 1]

This situation is what you call being in between the devil and the deep blue sea. You need to pay enough tax to show serviceability on the borrowings and to give flexibility on the overdraft but also need to minimise tax as much as possible.
The banks now have a tick box situation going for borrowing and as long as you tick the boxes you are away. You need to show a decent profit to borrow money and keep the net asset figure from falling which unfortunately means paying tax.
They won’t really lend on asset value alone for long they aren’t really allowed to after 2009
Government bail out of banks meant they would claw the money back in tax

 

[Far North Gollach]

Why not go as a Limited Company

I know a lot of guys used to be Limited Companies when working Offshore but they changed all the rules and most of them went back to PAYE as the Taxman tightened down on a lot of the perks. You would need some decent advice on this from a Tax specialist IMO.

 

[Bokey]

If you you go limited you'll be paying corporation tax which is lower than normal income tax I think

 

[Lincsman]

In the past i have piled cash into a SIPP (pension fund) when it lands there it gains 20% from the treasury and deduct some off your 40% band, buying a £100K tractor save you some... but not much in the end because tax isnt at 100% yet.

Meanwhile i have had 25% of the pension out as a tax free sum, and bought a house with it... some more income and tax!

 

[Lincsman]

If you you go limited you'll be paying corporation tax which is lower than normal income tax I think

Correct, but if the farm lose's money one year the directors still pay tax on drawings, where sole trader pays none and carry's forward the loss.

 

[Hilly]

My son works for agricultural accountancy firm that would gladly help/advise you, if you would like details just pm me. They big but not huge firm and get a very good name in the agg community.

 

[Tamar]

Simple solution........... buy some landrovers @Landrover ......... that sorts the tax bill in repair bills !

 

[Landrover]

Simple solution........... buy some landrovers @Landrover ......... that sorts the tax bill in repair bills !

Haha ! Been trying for years not to buy the bloody things ! Though the way my nissan is running at the moment it makes a Landover seem reliable !

 

[vantage]

Can anyone recommend a tax specialist, our tax bills are getting ridiculous, we need some help to make our business more tax efficient, we use a large firm of accountants that are very good but too efficient, and would like a different set of eyes to see what could be done, its turning into a never ending circle now with investment in the buiness to offset tax being impossible to do because there's no spare cash because of our large tax bills ! We do run a old fashioned business but are somewhat stuck because of to elderly partners (my parents)who are stuck in there ways, and to give you some idea of our combined tax bill the 4 partners have paid in the last 18months £120k+ in tax, any suggestions would be good

A pat on the back from @ollie989898 !

We have a Limited company in the partnership and move the profits about accordingly

How does that work for IHT?

 

[gatepost]

Now as I'm a much smaller business I wouldn't dream of offering advice to anyone, but one or two observations which I have taken on board over the years from different folk including a very helpful tax inspector during an investigation! it's about balance folk get fixated about not paying any tax, and spend money to do so, only spend on useful business assets, but you may as well upgrade a bit, capital expenditure relief is taken off taxable profits not the tax bill, there is an argument for putting capital expenditure on the overdraft, on the basis that you can pay it off any time, however that can lead to profits with no cash.

 

[livestock 1]

Trouble is cash flow. Annual accounts might look good cash flow might well still be a pain

 

[midlandslad]

Paying the overdraft off comes from taxed income.

A lot of people always forget that only the interest on a loan is tax deductible.

 

[puppet]

In most other jobs the more you earn, the more tax you pay. It is generally a sign of success. No point buying kit to sit in a shed just to save on the tax bill while losing 25% in depreciation and paying it off at £1000 a month. Lack of cash flow kills a business.
A new accountant may be the opportunity to get you all round the table to discuss a plan and put money away for the tax bill. They may see opportunities to save some tax with a fresh eye.
Some people live happily with debt. It sounds as if you don't so concentrate on getting it down. You are on a fair scale but look at every item of spending for 3 years, turn a profit, get the O/D manageable and pay some tax.

 

[Anymulewilldo]

And have kids

And buy more sheep...