Wife putting afew hundred pounds in to farm account.

[David.]

I was talking in general, not presuming on OP.
It is prevalent the World over, wives' income propping up farms.

 

[Treg]

Is there a special site you can get one of these generous wifes?

 

[Kiwi Pete]

"funds introduced" or to keep it simpler for accounting purposes, as @Exfarmer says: show it as a loan. I prefer to keep personal stuff out of the business as we trade as a LLC

 

[neilo]

Is there a special site you can get one of these generous wifes?

I have one, we live mostly off my wife's wages. Unfortunately the farm pays those wages to her though...

 

[Chasingmytail]

It is sad to see partners money go into a farm to bolster income but if there are children to feed, holidays to be had, school funds for trips and other endless fees, clothing, bikes and toys to pay for, nice car on the drive then there will never be enough profit off the farm to cover this unless the farm brings in generous returns. A household needs such a big monthly income to sustain it - the modern family will not make do and mend no more. A farm income would have to be pretty generous to sustain a wife to not be at least a part time worker on the farm. To be able to bake and craft all day while the husband toils on the farm cant be acceptable anymore can it? I see no issue with a partner bringing in an income to make a comfortable life within the home. Saying that why put the money in the business account because unless your earning vast amounts most of the income is going on food, everyday spends,, household expenditure then keep the money separate and use it for that.

 

[Tarw Coch]

It saddens me too, farm wives going out to work to prop up a farm.

Many wives of those who have nothing to do with agriculture go out to work and contribute to expenditure such as a car.
The op doesn’t say she’s propping up the farm , he’s just worried that his wife’s income will get taxed twice, I’m sure his accountant can sort it out for him.

 

[Treg]

I have one, we live mostly off my wife's wages. Unfortunately the farm pays those wages to her though...

 

[Tubbylew]

If it were me I reckon i'd get her to squirell it away somwhere and blow it on the finer things in life tbh. Get her to treat you to a nice holiday somewhere.

 

[bitwrx]

It saddens me too, farm wives going out to work to prop up a farm.

Two-income households have been the norm for quite some time. It's one of the things that has sustained the inexorable rise in consumption (or "growth" as economists and politicians are wont to call it) over past decades.

Why should farming families be exempt?

 

[Jackov Altraids]

Two-income households have been the norm for quite some time. It's one of the things that has sustained the inexorable rise in consumption (or "growth" as economists and politicians are wont to call it) over past decades.

Why should farming families be exempt?

There is a distinct difference between a 2 income household and 1 income which is supporting the others loss making business.
Of course there are many good reasons for doing this such as tax efficiency and avoiding borrowing costs but for many it just hides an uncomfortable truth.

 

[Tubbylew]

Two-income households have been the norm for quite some time. It's one of the things that has sustained the inexorable rise in consumption (or "growth" as economists and politicians are wont to call it) over past decades.

Why should farming families be exempt?

Why are the general population owed cheap food? Two income housholds are normal when both parties are employees of various companies, however whilst I don't mind subsidising my farming habit with my own off farm work, I wouldn't expect my wife to subsidise my own poor financial decisions generally speaking, but farms aren't just bussinesses they're homes, so it's sometimes a nessescary evil. If I ran a manufactuing bussiness I doubt she'd be so keen.

 

[Highland Mule]

There is a distinct difference between a 2 income household and 1 income which is supporting the others loss making business.
Of course there are many good reasons for doing this such as tax efficiency and avoiding borrowing costs but for many it just hides an uncomfortable truth.

The OP doesn't describe a loss making business but exactly the opposite - it makes enough profit to subsidise the wife's car expenses. I'm sure there are actually very few loss making enterprises in agriculture if people were honest with themselves.

 

[Jackov Altraids]

The OP doesn't describe a loss making business but exactly the opposite - it makes enough profit to subsidise the wife's car expenses. I'm sure there are actually very few loss making enterprises in agriculture if people were honest with themselves.

Sorry for going off topic, I was adding to the general discussion rather than the OP's particular circumstance.
But.... why the need to pay in any of the wife's wages if the farm makes enough.......

 

[PSQ]

Replace her car with a van (commercial vehicle) which is substantially more tax efficient than a car, and remember to apportion the private and commercial usage for accounting purposes. I take it she regularly picks up farm supplies on her way to and from work?
- Nothing says "I love you" more than a Citroen Berlingo, or joking apart, a Fiesta ST Line 'van'.

 

[farmerdan7618]

As long as your accountant is worth their salt it won't get taxed twice. Tax is based on profit, and profit is not the same as cash.
Make sure you give them the info though, and I say this as an accountant, 'we want you to be in the best possible position for you, but we can't do it if we aren't told what is going on'
Also, just because the payment for the car comes out of the farm account doesn't mean it is being treated as a farm expense - could easily be going through as drawings. If it is used for the farm at all, let your accountant know, as said above, 45p a mile tax free or apportionment of running costs are available.

 

[Highland Mule]

Sorry for going off topic, I was adding to the general discussion rather than the OP's particular circumstance.
But.... why the need to pay in any of the wife's wages if the farm makes enough.......

Because the farm business is set up such that cashflow is a bit tight and there's not really enough to both provide free transport to wife and also expand/ diversify etc? Or the spouse has more money than they need and can see it better invested in the farm than earning 0% in a bank account? Plenty reasons why even the most healthy and profitable business can benefit from additional capital investment.

And generally too - most farm businesses are profitable, once you look at the accounts properly. Perhaps not in cashflow basis or from what you see on the tax return, but once you include asset (land) appreciation, strip out very generous personal benefits and the likes. We wouldn't do it if not.

 

[dudders]

My wife has a good job and has started putn a few hundred pounds in to the farm account, to help pay for the payments on the car, etc, so this money is taxed before it goes in, but how does that work for tax on the farm income, don't won't taxed twice.

If your wife's money has been declared for tax once, it doesn't get declared again. She can do with it what she likes - the fact it goes into the farm account does not make it farm income. As someone has said, if you want to keep track of it, call it 'capital introduced', but mark up where it came from, so it can be proved if necessary. Treat it either as a gift or a loan, but it's NOT taxable.

It's the same if you sell something that's personal, not business, eg: some books or a guitar. If the money goes into the general farm account because that's the only account you have, just mark it as 'private - sale of guitar'. When the farm income gets totalled at the end of the year, such items are capital introduced - they're not taxable.

But if you start buying and selling guitars as a business sideline, then the costs and income from that enterprise become part of your business and have to be declared.

 

[teslacoils]

Online accounts software will let you tag it as capital introduced by partner a,b,c,whatever. Easy to keep track of.

They may then be more sceptical when you say that a holiday can't be had, just as a new bull arrives.

 

[farmerm]

It is capital introduced not income so no tax on it. Its the same as setting up a new business and starting with £10,000 in capital, you dont pay tax on that money, you pay tax on any profit made.

 

[Wombat]

Reads more to me that the farm is not only supporting itself, but paying part of the running costs of a car for the non farming partner. Probably financially strutured that way as a tax benefit too - certainly that's what I would do if it was me.

Let's not forget the multitude of benefits you get from running your own business from your own home, and manipulating the finances to your benefit. How many of us pay for our mobile phone from taxed income, for a start?

Or that spanner you need to fix the lawnmower