[brigadier]

Hi, sorry if this is repeating anything. Ive just started and  went to see my accountant the other day.  We've used him before for small stuff and he is local....however, it didnt go well, (I did check to  make sure he was familiar with small holdings), firstly he had double booked me so had to come rushing back, then he didnt have a pen, he had to borrow mine.
It was like pulling teeth, he didnt volunteer information or help, I had to press him for info on the few things I had learned from a friend. I realised there was no way he was going to be useful except for form filling and filing.
So...... whilst I am looking for another accountant, (I may have someone sorted) and bearing in mind Im a start up what do I need to do to maximize my income.  Is there anyone on the forum who is good with this side of things?
thanks so much.
ps Im doing four sheep for wool
duck eggs and bees.

[doganjo]

An accountant can't really help with that - only you know your business and what you can sell or can't - market research is what you could do - ask other smallholders in your area, ask neighbours, friends what they'd like to buy from you.  Go to your nearest suppliers of agri goods and ask them. Decide what you can supply and take it from there.

An accountant can help you with costs and profit margins once you have decided.

[Louise Gaunt]

With regard to legitimate business expenses, what is allowable against tax etc, we went to a couple of seminars run by HMRC specifically designed for new, self employed business owners. I think they have stopped doing live sessions, but there are web based seminars on the HMRC website shich you might find useful.

[shygirl]

With regard to legitimate business expenses, what is allowable against tax etc, we went to a couple of seminars run by HMRC specifically designed for new, self employed business owners. I think they have stopped doing live sessions, but there are web based seminars on the HMRC website shich you might find useful.

in Scotland there are business gateways and they help with business start-ups including tax and accounting courses for free. they were really handy. I do my own books and self-assessments.
when we first moved here the old owners were adamant I saw a farm accountant but it was a waste of time and I regretting going.
til you know what you are doing they can't do much to help. instead focus on your business, website and marketing and until you have a healthy profit - an achievement in itself - do the accounts yourself. its not difficult. there are good bookkeeping diaries in wh smiths that help you do it properly.
if you are making a packet, off-setting against another business or vat registered , then an accountant may be helpful.

[doganjo]

I have found that Business gateways can sometimes confuse issues though, although they give good advice otherwise.

They will tell you to have a separate current account and credit card for the business, but in practice if you have four  cards  in your pocket you are quite likely to inadvertently use the wrong one if in a hurry, So I always advocate only having one bank card and one credit card and doing an analysis between business and private as you are going along - how many times have you gone to tesco and bought paper and envelopes for the business and groceries for yourself?  Too much of a faff to pay for them separately - far easier to use a spreadsheet.

[Berkshire Boy]

For 4 sheep, duck eggs and bees why on earth do you need an accountant. The profit, if any that you make will pay his bill.

[doganjo]

I quite agree.  I'm happy to send you a sample spreadsheet if it will help.

[brigadier]

oops, I see you've misunderstood me , are you aware that if you and your partner (for example) are running the SH  then one of you can work also and any losses can be off set against their PAYE, so in my situation my OH is quite well paid so in the first year our losses on setup will be declared against his PAYE so he pays less tax. So although Im happy to do a tax return for simple earnings, once you start off setting against another income then it becomes tricky. Also you can volunteer to VATregister which means you get the VAT back on your purchases, also means you have to charge it on sales but as I wont be doing much of that in the first year I will worry about that later.
Also you can go back three years on expenditure?
So that's why I need an accountant and perhaps some of you might too!
Thank you for the info re the gateway courses- sadly I think our start up business advisers were a victim of the ressession however I will look and see what is online.

[ellied]

I went to Business Gateway for startup courses and they brought HMRC staff in to run the tax and VAT related ones and all free of charge so even if you're not covered by BG then look at the HMRC as the best source of info on tax and VAT registration pros and cons.  I didn't go the VAT route after speaking to them, and I don't have an earning spouse/partner to offset returns but they did Q&A for any circs that attendees raised aswell as the basics and I found them pretty good, other than the thing about separate business banking which proved a costly mistake after the 2 year free intro period with charges on everything, and the hassle meantime when I think it is more for retail and higher turnover businesses than the average smallholding startup - get your 2 years free banking when it will be worthwhile, if at all. 

[brigadier]

thanks Ellied, that's helpful.
I had a business account for a previous undertaking and that proved troublesome when my business was running down so I think I will avoid another.  Will check out HMRC ta

[Herdygirl]

Hi Brigadier
 
It would be interesting to know where you got the possible VAT rebate information from and also the PAYE info?
 
As far I have managed to find out. Famers/smallholders do not get VAT refunded nor can you offset any start up costs for a smalholding as it is considered a 'hobby farm' by the tax man.  4 sheep, bees and ducks hardly constitute a business? If it does then I will ring HMRC tomorrow! Oh and by the way It will probably cost you more to shear the sheep than what you will get for the wool.
 
best of luck
 
 

[benkt]

Re: VAT. I had a meeting with a lovely VAT man today who authorised our first repayment! We turn over about £15k a year and he didn't ask any questions about the profitability or income derived from the farm, he just enjoyed looking at spreadsheets and receipts.
Was VAT registration worth it?
Probably: we claimed quite a lot back from the early days when we spent a lot of fencing, tractor, animal housing etc. Now we've settled down a bit and most of our expenses are things like animal feed that are zero-rated anyway so its becoming less worth it as we only reclaim about £300 per year.

Re: bank accounts - as a not-for-profit we get free banking via the Coop and I make sure everything possible goes through the bank so that my accounts are pretty simple - its more or less just a question of downloading statements and sticking them into the right spreadsheet.

[brigadier]

Hi Benkt,
thanks for that- I don't appear to be talking out of my backside then

Herdygirl- I have found this article that would seem to support what Ive been trying to find out, maybe you do need to ring HMRC
http://www.countrysmallholding.com/features-special-reports-a-taxing-issue--237811

As for sheering costing more than the wool, my sheep naturally shed so its more a process of collection, which is scheap cheap as I pick it up!

Anyhow Ive had some really constructive helpful responses to my genuine question so thank you to the people who have not scoffed at my simple request for advice.

But ultimately I'm aware it is really tricky these days to make a profit off the land, as a smallholder my main aim is to put my land to good use to support my lifestyle of living in the country and having horses, and enjoying caring for the animals and practicing country pursuits, but I want to use the cost of doing this in the most efficient way and perhaps get a little of the hard earned back from the IR, if people want to scoff then so be it!

[Berkshire Boy]

I can't see that anyone scoffed at you.
 
You asked a question and you got some answers, if you had explained properly in the initial post what you needed to know the answers would have been different.

I don't think a first post should end with you criticizing the people you asked for help.

[shygirl]

no ones scoffing you.
iv done my own accounts for years so am aware that you can offset a unprofitable business against other income. I am sure you can also run a vat-reg as unprofitable for a certain amount of time before they have a hissy fit - giving you time to get vat costs back.
try an accountant who specialises in farming, there are plenty around my area.
good luck