The change from tax credits to universal credit.

[Still Farming]

You hope that the company year end will be chosen so there are no loses and all directors loan accounts etc are at zero on that day.

Different if sole trader or not company possibly

 

[ringi]

Monthly accounting sounds a ball ache, although on the other hand maybe easier while things are fresh in the mind. Selling stock wouldn’t give a monthly profit surge as the change in stock value would make the adjustment

But the complete system is pushing cash accounting and it is very hard to justifying valuation of stock until selled.

 

[Still Farming]

Yet keeping the money in the bank to buy equipment next year would disqualify from universal credit. Likewise if a disabled person saves money to buy a car rather then having leased cars.

Most Car dealers won't sell anything if they weren't on PCP Or disability??

 

[Goweresque]

Monthly accounting sounds a ball ache, although on the other hand maybe easier while things are fresh in the mind. Selling stock wouldn’t give a monthly profit surge as the change in stock value would make the adjustment

I'm not sure the UC system is that sophisticated. Its purely cash in/cash out. You aren't going to be able to produce a formal account each month, with stock values updated.

 

[ringi]

I suppose for me it would be at the end of the summer when I get paid for baling and wrapping that would be a sudden income

Contracting is no different to many roofers who are reasonably required to take other work in winter.

 

[Still Farming]

Self-employment and Universal Credit

Claiming Universal Credit if you're self-employed - eligibility, reporting your earnings, start up periods

www.gov.uk

 

[Goweresque]

I'm afraid that this is going to impact farming at the bottom end quite considerably. As the minimum wage continues to climb (£11-44/hr after April 1st, or £22k/yr for a 37.5 hr week) its going to become increasingly difficult for farmers to access UC, as they will (not unreasonably) say 'You could earn more money working less hours by doing a minimum wage job, therefore the taxpayer isn't going to subsidise your non-profitable business'. A farming partnership of 2 working age adults would have to generate gross profits of £45k ish to match 2 minimum wage jobs. How many are going to be able to do that?

 

[Still Farming]

I'm afraid that this is going to impact farming at the bottom end quite considerably. As the minimum wage continues to climb (£11-44/hr after April 1st, or £22k/yr for a 37.5 hr week) its going to become increasingly difficult to access UC, as they will (not unreasonably) say 'You could earn more money working less hours by doing a minimum wage job, therefore the taxpayer isn't going to subsidise your non-profitable business'. A farming partnership of 2 working age adults would have to generate gross profits of £45k ish to match 2 minimum wage jobs. How many are going to be able to do that?

Work is work after all, be it self employed or employed?

 

[ringi]

I'm not sure the UC system is that sophisticated. Its purely cash in/cash out. You aren't going to be able to produce a formal account each month, with stock values updated

I just had a thought, if the land is owned by the parents, why not have the stock also owned by the parants, with the parants paying a fixed monthly "management fee"? Set the "management fee" based on the profit the parants got from the livestock the year before.

Clearly all livestock transaction should then be in the parent's business bank account with a clear transfare eqch month for the "management fee".

 

[ringi]

I'm afraid that this is going to impact farming at the bottom end quite considerably. As the minimum wage continues to climb (£11-44/hr after April 1st, or £22k/yr for a 37.5 hr week) its going to become increasingly difficult for farmers to access UC, as they will (not unreasonably) say 'You could earn more money working less hours by doing a minimum wage job, therefore the taxpayer isn't going to subsidise your non-profitable business'. A farming partnership of 2 working age adults would have to generate gross profits of £45k ish to match 2 minimum wage jobs. How many are going to be able to do that?

Could also make a case that the requirement to sell all investment to cover living costs includes farm land.

 

[muleman]

With single farm payments going and no tax credit/ universal credit things are going to get tough for the self-employed farmer.....suppose it's just another sign that we aren't really wanted!

 

[Goweresque]

Work is work after all, be it self employed or employed?

No it isn't, not in the eyes of the benefits system. There's the minimum wage floor. That is to say as the minimum you can earn from paid employment is MW, they assume that your business should be capable of generating at least MW profits, and won't pay you anything if your earnings are less than that. This is to prevent people having 'hobby' businesses that they hardly work at, and earn b*gger all, and the owners then claim benefits to make up their incomes (this is what Big Issue sellers were doing - claiming to be self employed 'traders') Because of the rise in MW over the last few inflationary years (25%+ rise) and farming's perennially low profitability farmers are now reaching a point where their earnings are less than MW and thus can't claim benefits.

And to be frank I think its right. If you want to work 60 hours a week and end up with £15-20k of profits at the end of the year thats your decision. You could work 37.5 hours a week as a paid employee and earn £22k. There's no reason the taxpayer should pay for your lifestyle choice.

 

[ringi]

With single farm payments going and no tax credit/ universal credit things are going to get tough for the self-employed farmer.....suppose it's just another sign that we aren't really wanted!

I think there will be a move towards using limited companies rather then being self employed, but that requires paying for accounting advices and farm accountants learning a totally different legel setup.

The accounting, benefits and tax rules for self employed are being made a lot simpler, but that does not fit farming.

 

[Goweresque]

Could also make a case that the requirement to sell all investment to cover living costs includes farm land.

No, ownership of assets is not included:

 

[ringi]

This is to prevent people having 'hobby' businesses that they hardly work at, and earn b*gger all

It also presents cash payments in the building trade being used to illegally claim benefits in addation to advoiding tax.

There's the minimum wage floor. That is to say as the minimum you can earn from paid employment is MW, they assume that your business should be capable of generating at least MW profits,

The issue with farming is the benefit system assumes each month is fully independent when clearly with farming it needs to be averaged over the year.

 

[ringi]

No, ownership of assets is not included:

View attachment 1160624

But land that you could let and is not generating a profit higher then it could be let for is hard to justify as being a business.

 

[Still Farming]

No it isn't, not in the eyes of the benefits system. There's the minimum wage floor. That is to say as the minimum you can earn from paid employment is MW, they assume that your business should be capable of generating at least MW profits, and won't pay you anything if your earnings are less than that. This is to prevent people having 'hobby' businesses that they hardly work at, and earn b*gger all, and the owners then claim benefits to make up their incomes (this is what Big Issue sellers were doing - claiming to be self employed 'traders') Because of the rise in MW over the last few inflationary years (25%+ rise) and farming's perennially low profitability farmers are now reaching a point where their earnings are less than MW and thus can't claim benefits.

And to be frank I think its right. If you want to work 60 hours a week and end up with £15-20k of profits at the end of the year thats your decision. You could work 37.5 hours a week as a paid employee and earn £22k. There's no reason the taxpayer should pay for your lifestyle choice.

Lots in those positions whatever you make of it.
As long as you qualify you QUALIFY.

 

[teslacoils]

Cross posted with you, your experience is the plan, force people out of credits is plan A, collect financial data is plan B.

This.

When I started the farm we paid some tax as I thought that contributing to the "system" was the right thing.
Then we had children and needed the govt support we were entitled.
It turned into a complete shitshow of forms and questions etc.
The several years later we got a bill for a few grand, five minutes to pay it, and basically told we were in the wrong - all submitted by the accountant.
Since then my attitude to how the govt treats banks (lets them off) and treats the poor (fisted up the chutney) has let to a complete reassessment of my view of how I can best contribute to society.

 

[ringi]

Hence I think child benefits should be much higher and have no linkage to the parants income. Likewise government funded childcare should not exclude people on high incomes.

Trying to make systems "fair" and stopping the rich people getting government help they don't need is a good way of winning elections but creates very complex rules and lots of admin costs. Both political parties are yet to understand the great harms they do by making government surport based on income.

For example many people have reduced the number of days they work as they would otherwise lose all free child care and have to pay out many thousand of pounds due to earning one pound too much. Likewise care homes can't get staff to work addational shifts as a single mother loses so much benefits if she earns too much yet have addational costs if she works an addational shift.

 

[muleman]

Hence I think child benefits should be much higher and have no linkage to the parants income. Likewise government funded childcare should not exclude people on high incomes.

Trying to make systems "fair" and stopping the rich people getting government help they don't need is a good way of winning elections but creates very complex rules and lots of admin costs. Both political parties are yet to understand the great harms they do by making government surport based on income.

For example many people have reduced the number of days they work as they would otherwise lose all free child care and have to pay out many thousand of pounds due ti earning one pound too much. Likewise care homes can't gey staff to work addational shifts as a single mother loses so much benefits if she earns too much yet have addational costs if she works an addational shift.

A good way of losing elections too Id have thought