[Womble]

Just curious really, but I've just spent all day doing my business accounts (nothing to do with smallholding). However, it got me wondering what financial arrangements smallholders usually make for this sort of thing. For example, even if you were to sell a few eggs at the end of the drive, might it make sense to officially offset the costs of feed, birds, netting etc against the (meagre) profits made?

Now, I know we've done the debate of "can you make a living from smallholding?" a number of times, but this one is subtly different.

So, what do people on here do, and why?

Oh, and if you're replying to the thread, it might be worth saying how many acres you run, and what area you tend to specialise in if any  .

Cheers!

[Daveravey]

I wouldn't call what we have a business, more a hobby gone wrong   

We manage to fit everything into our garden..... hens in the back & veg in the front (where normal folk have flowers).

We sell a few eggs to our neighbours, plus a few growers/pol birds to help pay for feed etc

As it stands right now, we receive around 10 calls or emails most days from folk wanting hens, but struggle to find decent young stock to grow on for a few weeks & get them used to being handled etc, before finding new homes for them.

I'd love to expand & i've approached 99% of our local farmers within 5 miles to try to rent a corner of a field, but either they're reluctant once they know what it's for, or use 100% of their land for themselfs.

In saying that, i might just keep it to what we have, as paying rent on a field will take away the little profit we make .... it's certainly not a "get rich quick scheme".

[JulieS]

We're self employed and trying to run the smallholding as a business.

We have 8 acres, with a holiday cottage and I'm breeding GOS pigs.....just started a butchery here too.  Selling eggs too.

Just into our 2nd year so not making a profit yet.

[Hilarysmum]

Not sure if I count, living in France, but yes we struggle to run our pigs as a business.

[bazzais]

I run discount-voucher.co.uk amoung a few other sites for a living from home, any money from the farm really just about covers the costs of running it in the first place.  Infact with capital expenditure this year and the next its looking like its going to take many years before it will pay itself back. 

As a ltd company I had to buy the farm from business funds then re-buy the house personally as I intended to live in it and its counted as a benefit in kind if I lived here without purchasing it from my company.

We have 69 acres here which we have 100 sheep, 10 chickens, 2 goats and Helen has 15 or so horses.  We can expect a small profit from the sheep and a few pence from the sale of eggs but nowhere near the labour costs if it wasnt us supplying the labour.

Unfortunately as horses are not agri - on paper I have to charge Helen tac on a monthly basis as its my companies land and not mine to lend.

As the land and buildings were also bought through my ltd business I have to try and put everything I can through the books as I have to try to make the farm look like a business and not a hobby - if its seen a 'lifestyle business' it could be seen as a benefit in kind and I would have to buy it all personally which would incur a very large tax bill.

Obviously an open forum is not the place to admit tax fraud (even how small the amounts are) - but all I can say is that most people supplying small services - work with cash only. Sometimes the term 'petty cash' is stretched to include purchasing these services.  Its all too much paperwork to account for a few quid here and there and really its a waste of time when its only small amounts.

Ta

Baz

[Womble]

That's interesting bazzais - what's wrong with running a "lifestyle business" then? I mean, if you run the farm as a business, but it doesn't make much money, or even runs at a loss subsidised by yourself, what's wrong with that?  At the end of the day, all small farms must surely be "lifestyle businesses",  since it's clear that there's more money to be made per hour elsewhere, hence why would anybody do it if it wasn't as the result of a lifestyle choice?

I can see that it could get complicated in that something like meat or eggs for your own consumption would become a benefit in kind from the farm to you for example (though you could probably offset that against the monetary value of your labour in producing them. However, to come back to my first point, what would be wrong in running the farm as a business in any way you like, whether it makes money or not?

[Roxy]

When we first moved here, our mortgage advisor told us not to mention the land when applying for the mortgage - he said they would suspect we would be running it as a business, and in which case they would insist we had a business mortgage.  But then the surveyor came out, and could obviously see it was sitting among fields, and had cows on it .........but we kept quiet anyway.  I assume a business mortgage would be more expensive?

[bazzais]

If I owned the farm personally then it wouldn't matter at all thats its being run at a loss or just breaking even, but its owned by my Ltd company.  If I ran it at a loss then the question would be raised that maybe I had had a personal interest or lifestyle choice in using the Ltd company funds to purchase the land.  ie buying the farm just to meet my own personal lifestyle choice rather than as an asset to further 'the company'.

There is nothing wrong with breaking even  - but if your making a loss then there is no sustainability and you'll go under before any tax inspection comes your way.  My predicament is that as I own another business and have used those funds to buy this place - I have to make it turn a profit as I live and spend all my time here. Its like for example, using my own company funds to sponsor a race car that I will be driving, or buying a swimming pool with sauna that I rent out for a pittance at the weekend but spend all evening in their myself.

In all honesty I wish I'd never gone Ltd as its all too much pen pushing.  Even when swapping property between myself and my own company I have to have two solicitors because of 'conflict of interest'!?  I find it quite hard to think of things on those two different levels, its even a hassle to lend family money because of tax implications and codswallop laws.

I'd go soletrader again at the drop of a hat, being Ltd sucks.

Ta

Baz