Accounts attached - The current reality facing beef farmers - Any advice?

https://www.boards.ie/discussion/comment/118665513#Comment_118665513

Any high cost system in beef is doomed to failure.

From my perspective if you want to have sucklers you need a handy sized cow delivering a high percentage weaning weight off a low cost base.

I would agree that it is a good idea to buy plainer cattle as there are less people in for them and if the price is pulled you can still make a margin.

The OPs costs look very high to me and I have over 50 sucklers to beef on less land.

Bass Reeves

https://www.boards.ie/discussion/comment/118665576#Comment_118665576

I can only accept OP word that his land is good quality. Dunedin puts forward a high output medium cost (prodney making 2k+) suckler system. You are advocating a low cost low out put sysyem. The problem the with system us the calf has to pay for its Mama and Papa as well as there housing. It why many suckler farmers get fixated with fixed costs. As well when you add in straw and other costs a cow producing a calf to weaning costs Twi e the price if a mature bullock.

My.whe system is based on my margin. It's about keeping my costs under control, the better at cost control the higher my margin.

https://www.boards.ie/discussion/comment/118665716#Comment_118665716

My system is low input cost and high output.

These tanks of suckler cows are the problem. I would say my system is more productive than the op.

memorystick

2 of us working. She has a rental house. Beef farm of around 70 acres. Tax bill bill for 2021 17k. Feeling sick

mr.stonewall

https://www.boards.ie/discussion/comment/119872684#Comment_119872684

Is that including PAYE

blue5000

Have you much depreciation on the farm? Farm vehicle perhaps? Rent income is taxed at 50% AFAIK. But any expenses on the rental property can be written off against income. Still time to spend money this year, chat to accountant might be worthwhile in the next week or two.

Tileman

Yea it’s the income from the rental house which is a killer.

rental income is decent but when you get with a tax bill of 5o% and your still paying a mortgage on it, it is some dose.

politicians afraid to do something about it because it’s not pc correct in their eyes and they will get hounded by SF and social media on supporting landlords rather than tenants.

time to sell up while you can before SF come to power who have openly said they will take the option of refusing to sell rented out houses.

https://www.boards.ie/discussion/comment/119872684#Comment_119872684

You could pump money in to a pension to avoid tax.

memorystick

I bought a house this year but that’s a different matter. The house is my pension from work as only started back in the workplace a few years ago. I tend not to buy stuff that I don’t need. Maybe I need to change? Too cute maybe

https://www.boards.ie/discussion/comment/119874529#Comment_119874529

Buying stuff that don’t need to avoid tax is nuts. If it’s something you use most days then it’s a no brainier

Dunedin

https://www.boards.ie/discussion/comment/119872921#Comment_119872921

Tax bill is for last year.

893bet

https://www.boards.ie/discussion/comment/119874755#Comment_119874755

And how is this year? Perfect time if the year to look at in/out for the last year and assess liability.

funkey_monkey

I wonder how the OP is getting on - did they make/act on any decisions yet.

farawaygrass

https://www.boards.ie/discussion/comment/119872684#Comment_119872684

that’s including all the tax you and the wife would have paid already from your paye I’m assuming?

tax from rental isn’t automatically near 50%, it’s just that a rental income usually pushes people over the threshold.

its a sore dose to have to pay that much no doubt. If you were a big multi national you’d hardly Have to pay 1700, not mind 17k

Dunedin

https://www.boards.ie/discussion/comment/119875084#Comment_119875084

OP advised of tax bill of €17k for 2021. no amount of spending this year is going to change that (unless maybe he chooses a 3 year averaging but I’d expect his accountant to have all that discussed and explained already)

893bet

https://www.boards.ie/discussion/comment/119875433#Comment_119875433

Understood.

But unless he halved the rent this year then a similar problem will occur next year.

Now is a good time to look at how the account will fall and will be due next year so decisions can be made. That decision might be to forward but something or it might be to delay paying a bill. But that decision can be worth 1000s if made at the right time.

OP only hope for last year is maybe pension contribution or some fancy accounting.

blue5000

https://www.boards.ie/discussion/comment/119875433#Comment_119875433

Is averaging an option if so much of the income is off farm?

I know it's for 21, I was telling them to go meet with accountant asap to try prevent the same thing happening for this year's accounts. Sorry if I didn't make that clearer.

Bass Reeves

https://www.boards.ie/discussion/comment/119875712#Comment_119875712

You could not income average if you had an off farm income whether that is still the case or not I am not sure. It would not be helpful usually as most workers would be near the higher tax cut off anyway. You would want a large part of the 20% allowance available for that to be any use.

Grueller

I have substantial enough off farm income and I am on averaging. It is working very well for me at the moment.

TPF2012

Doing my self assessment with ros this week, joint assessment with wife and farm.

So, after expenses I have 1000 of farm profit, now I finished a new shed last year so have capital allowance of 35000,can use 15%which gives me 5000 of capital allowance for 2021.

Can that 5000 allowance be claimed against myself and wife's paye income and farm profit of 1000 or can it be only claimed against my 1000 profit from farm? Does it carry over to following year then as surely it just can't disappear.

1st year with a large capital allowance, and small farm profit, so struggling with this aspect. Will employ accountant going forward I think.

Say my name

https://www.boards.ie/discussion/comment/119875433#Comment_119875433

Don't know but maybe the high tax bill is due to a first year paying preliminary tax and the following years may be lower.

Rusheseverywhere

Full time farming here and you want to see depressing accounts should see mine still paying tax though. With lads working off farm do you get to write off farm losses against your PAYE income? Just to make up figures/example Your farm has a loss of 35k you work a job earning 70k and would normally be paying 35k tax on that job. Do you get that 35k back as farm losing money, a percentage of it or how does it work?

Bass Reeves

Yes you can write off farm losses against PAYE I come. It one of the perks.

@TPF2012 and @rushes@Rusheseverywhere go to an accountant familiar with farm accounts I use FDC they are not the cheapest but farming is a business like anything else and the taxation part@Rushden @Rushdenis where a lot of the profit really is

Rusheseverywhere

Thanks

I use IFAC think the bill for them is about 2k a year including book keeping. Have 3 cows to calve tonight inc one with a set of twins; it is kinda crazy that farm loss is an income write off; explains why contractors charge what they like! I am in foul humour as ft farming with sucklers is really a mugs game.

Bass Reeves

2 k is fairy expensive uuless a fairly decent dairy unit.I be a little bit with half that

Rusheseverywhere

Think 1200 for accounts and 800 for the book keeper; to be honest could do it myself but useful for farms loans think IFAC reports taken as correct and reliable have that from various bank lads. Made camoile tea have hot water bottle and alarm set for 3am.

Bass Reeves

https://www.boards.ie/discussion/comment/119879526#Comment_119879526

Mine do the bookkeeping for that price. I send in all receipts, accounts details on rentals etc

Cavanjack

I do all the bookkeeping, send it in to him on excel. Farm accounts and two house rentals. I get charged €550 including vat. It’s plenty. Would he spend 4 hours at it? I doubt it.

Rusheseverywhere

So story with me is bookkeeper girl I know from school she is meant to call to the house 4 times a year and do up projected taxes etc. I just drop stuff to her in Sept and she sends to accountant; that was my choice to be fair not hers. Where mine seems expenisive is my income is Dept money and cattle sales. Expenses just farm stuff and loans so as straightforward as it gets. Wonder if income based I have roughly 90k gross.

Bass Reeves

https://www.boards.ie/discussion/comment/119880921#Comment_119880921

TBH it looks like you are being taken for a ride. I presume with the 90k gross part of that is your PAYE income. There is no work for the accountant with that they just do the figures. I never get pre accounts done, I just let the apples fall where they will to an extent.

Previously I used have my accounts completed mid June every year. Lately it's starting to be Sept/Oct before the Accountant completes them. Which is too late for corrections to present year accounts

Rusheseverywhere

Yeah I agree time to change part felt had to keep the book keeper she has young family. Also yes accounts getting later and later.

No 90k is farm income. Have decent direct payments.

Grueller

https://www.boards.ie/discussion/comment/119882833#Comment_119882833

Is that 90k income you mention 90k profit, or 90k turnover. If its profit you must have a serious herd of stock to make that from suckling, fair play to you.

Tileman

Yea my accountant now 600€ for farm income and house rental income. Has put it up by 50€ each if the past 4 years. I have everything done on excel . Never takes u through anything and talks shite for an hour. Time for a change.

I would t say he spends an hour on it.

Rusheseverywhere

https://www.boards.ie/discussion/comment/119883047#Comment_119883047

No 90k gross 45k direct and same from the cows. The actually farming makes about nothing as in costs equals sales. Direct subs used for loans and live off; if I invest more into farm which I need to; I need to find a fat ostrich.

Stationmaster

Just finished filing the last Form 11 there now myself - a dose the way it's always bedlam for the last few days before the deadline but they're they all done now and 2 hours to spare!

I have a few couples working fulltime that still have a rental property and they are getting hammered in tax - it's not good especially when the rent is often only covering the mortgage payment so the cashflow isn't there.

Profits were up in general in most of my farmers for 2021 - will be interesting to see how 2022 goes.

Rusheseverywhere

https://www.boards.ie/discussion/comment/119883146#Comment_119883146

You are paying for his signature same is true of them all; remember all our accounts are self certified not audited accounts. I has audiitted accouts done once there auditor takes professional and legal respnsibility that accoutns are correct,

Few neighbours do their own and get on fine.

Good loser

https://www.boards.ie/discussion/comment/119883146#Comment_119883146

I wouldn't regard that as too bad. In 2021 I paid €1495 for a small beef farm and some investment income, no rentals.

Creeps up every year too.

christy c

https://www.boards.ie/discussion/comment/119883538#Comment_119883538

Nice feeling to be finished.

Was there an extension that you heard of? I see when I check the returns on ROS that the due date is showing as 20th November. Not that it makes any difference at this stage

Stationmaster

https://www.boards.ie/discussion/comment/119884593#Comment_119884593

Didn't hear that. What returns is that date showing up for? 2021 IT?

christy c

https://www.boards.ie/discussion/comment/119884723#Comment_119884723

Yes. See extract attached

KAMG

https://www.boards.ie/discussion/comment/119883146#Comment_119883146

I'm a practicing accountant. Working for a small firm. Deadline day was yesterday. Worked 13 hour days, 7 days a week for last 5 weeks to ensure all our clients who had records into us by 9th November (Week out from Deadline) were done. This was to ensure that all were in on time, to avoid a 5% surcharge and to lessen risk of Revenue audit. I don't mind working those hours for the few weeks. It's part of the job. Every job has their own busy periods.

As regards the cost of €600. That is very reasonable in my opinion. You say you have all done on excel. That may be the case. But is it 100%? Some of our clients have accounts on 'excel' but still it needs to be tweaked. The very lowest a tax return costs here is €250 plus VAT so €307.50. Regardless of how basic the tax return, is still takes 3 or 4 hours. (Meet client when bringing in records. Junior does the job. Senior does up letter. Secretary types and posts it. Client comes back and meets senior/partner). All time based. So, you don't feel the few hours adding up.

893bet

I pay 250 or so to a small 1 man band.

I have everything in an excel file. Money in and out and dates and categorised.

I don’t even give him receipts or dockets etc anymore.

Prob takes him an hour to put it together after that.

I keep excel file somewhat uptodate over the course of the year so I can make a small adjustment if needed as I have a fair idea of what capital allowances I have in works, what farm payments are due and what cattle I have left to sell.

Based on my projections to end of year I know that it makes sense to sell two more cattle than I had in plan this year to put against costs remaining to be paid out for this year rather than sell next year and potentially have a tax liability against them.

As a small farmer with less than 50k turnover this is not a big task to keep on top off and pays better than any other farmer job pro rata time spent

KAMG

https://www.boards.ie/discussion/comment/119884970#Comment_119884970

Your probably close enough to the truth to be honest. We have some of those type of clients. I would say 2 hours though would be very least it would take to do the actual job. But then, do you come into him to discuss things or see how you can change things in the future? People always leave out these things when discussing this topic. Or also, the 2 or 3 phone calls during the year. All costs the client. Most senior accountants would be on a charge out rate of €80 plus, an hour.

893bet

https://www.boards.ie/discussion/comment/119885049#Comment_119885049

Might be 1-2 10 minutes calls or usually an email or 2 so the question.

He has a day job also as a business owner so email is preferred as he can answer in his own time but yes that time must be paid for.

893bet

But my main point is is you are waiting until the following august/September to estimate tax liability then you are not in full financial control of your affairs.

JohnChadwick

Say you are building a house, how much steel/concrete/timber used in the house can you put into your farm expenses/capital allowances...?

KAMG

https://www.boards.ie/discussion/comment/119885204#Comment_119885204

Is this an actual genuine question? Like, what do you want people to reply to you. That they have done similar and got away with it?

The answer is NONE.

funkey_monkey

Do you have the option of going digital with your bookkeeping?

Up here MTD (Making Tax Digital) has come in. Every invoice we upload using smartphone app - take a photo of it in an app which parses through it and extracts all the details such as invoice no., date, subtotal, VAT, total, supplier/customer name etc. This then gets sent to accountancy software which makes an attempt at matching the invoice to bank statement - remainder is done manually.

It can then spit out reports and tax payments/refunds etc. Accountant has access to this accountancy app and does something at end of year for filing accounts. Not gone through process yet, but I would like to think that the cost will go down as it is all digitised and easier for them to access - plus it is consistent across all their clients.

Jb1989

Round €500 here for a small enough farm. Can't complain. Great accountant firm.

Said it before and I'll say it again, they deserve every penny of it and more for working for the farmer, when you compare to a solicitor who works for the government but charges extortionate figures for any kind of business to the likes of myself, and both firms have similar costs, and training to get them qualifications.

Bass Reeves

https://www.boards.ie/discussion/comment/119886992#Comment_119886992

I would not over crib about the price there is 23% vat in that or about 95 euro so only 405 goes to the accountant.

However there is the other side like what @Rusheseverywhere is paying