Dont miss any tax pay-back opportunities
GOOD tax planning could enable farmers currently trading at a loss to claim back cash from the Inland Revenue.
"While we are not talking huge sums of money, with cash at a premium every little helps," Colin Walker, tax partner with Leicester-based Pannell Kerr Forster, told the annual conference of the Incorporated Society of Valuers and Auctioneers at Grantham.
"With a little bit of lateral thinking and foresight, perhaps involving a spouse who works away from the farm and has an income, or younger members of the family who also pay tax, sums of say, £2000 each could be reclaimed if they become partners in the farming business. An extra £8000 could be vital in some instances."
Full averaging over a three-year period could be achieved when profits in one year did not exceed 70% of the other. Similarly capital allowances on plant and machinery could be used to create or increase a trading loss, but did not need to be claimed in full. Restricting a loss in one year might enable further losses to be claimed in subsequent years.
Enhanced personal allowances for pensioners were also available, said Mr Walker. These applied for the whole of the financial year irrespective of the date of the birthday.