Agriculture and Horticulture

Agriculture and Horticulture

With 150 years combined knowledge and expertise in the agricultural and horticultural sector, we at Sowerby understand that farming is more than just a business to many of those who work the land.

 

That said, we also know that like any business, the need to maximise profitability and minimise tax liabilities remains key.

 

We are aware of the challenges faced on a daily basis by those within the agricultural and horticultural sector. Fluctuations, both in sales prices for your commodity and the costs of materials, can be devastating.

 

Our partners are also aware of the capital-intensive nature of the business and the need to be tax effective. With this in mind, it has always been our view that investment in new machinery should only be when necessary, and not with the aim of saving on tax.

 

Many of our farmer and horticultural clients have been open to the idea of diversifying risk or intensifying the business to ensure future profitability. They usually fall into the following sectors and each has unique problems to face:

  • Arable farming
  • Livestock Farming
  • Horticultural
  • Renewable Energy and Fit Business
  • Hospitality

Arable Farming

We understand the unique challenges facing arable farmers whether they be landowners or tenant farmers.

Landowners

To receive the best advice, our partners would need a full understanding of the land in question and its terms of ownership. This way we can ensure that your business does not incur tax penalties.

 

Part our service would be to benchmark your property against the data from our clients, comparing yields, average prices and margins for the business.

 

We can also assist and advise on the purchase of land together with the related finance needs.

 

Succession planning is no longer the automatic option given Inheritance Tax implications. As value of land has increased significantly, the tax implication of getting the succession wrong can be heavy.

 

Farmers have attempted to combat rising tax implications by converting excess farm buildings into holiday homes, however this type of arrangement could complicate current tax arrangements. Be sure to seek advice before embarking on such a project.

Tenant Farmer

To offer the best advice, our partners would have to be fully aware of the tenancy type of the farm. We will offer advice based on your aims for the business and whether you have a succession plan.

Livestock Farming

We at Sowerby understand the capital costs incurred by intensive pig or poultry farming. We can assist and advise on the tax implications of building investment and capital allowance claims.

 

The price obtained for each product is key, especially taken against the cost of feed.

 

Our partners will investigate Research and Development Tax Credits (R&D Tax Credits) which may offer your business sizeable concessions and are an area often overlooked.

Horticulture

We at Sowerby understand that horticulture production is largely dictated by customers of the multi-national companies which sell your products.

 

The key, therefore, to maintain profitability is to ensure a high yield and control your costs.

 

Staff costs are an important concern, in particular rises as a result of increases to the National Minimum Wage (NMW). Many in the sector have historically used piece rate to control the hourly wage costs. It is imperative to keep this piece rate above the NMW to comply with current legislation.

 

Investment in renewable energy is available to many businesses and can help reduce the key costs of heating.

 

Tax implications within the sector are complex and need to be explored to ensure you are as tax effective as possible. Whether that be with the capital allowance claim for the glasshouse or Research and Development Tax Credits (R&D Tax Credits), our partners will help ensure you claim all the allowances available in the most tax effective manner.

Services

Our services include:

 

Annually

  • Preparation of annual accounts with benchmarking in a timely manner.
  • Presentation of accounts to partners, ensuring they are fully understood.
  • Preparation of the partnership Self-Assessment tax return.

 

Cash Management

Management of farm cashflows is a paramount concern. We at Sowerby work to ensure that sufficient cash is always available for partners and the farm itself to meet business and tax obligations.

 

  • Preparation and presentation of quarterly or monthly management accounts.
  • Preparation of projections and cashflow forecasts.
  • Provision of bookkeeping and payroll or working closely with farm secretaries in this role.

 

Strategic Assistance

Long-term goals and aspirations create the need for specialist advice. We can assist the farm, partners and management with long-term strategic thinking.

 

Succession planning is a primary concern of many farmers and remains a tricky process to put in place. An open discussion with your family about the future always ensures a smooth transition, whatever your plans.

 

We at Sowerby can offer advice on the project. The complex nature of succession planning would require us to work in partnership with your land agent and legal counsel.

Benchmarking

We have a large number of clients in this sector, and as such there is a large amount of data at our disposal which allows us to help our clients and their businesses very effectively. We at Sowerby can provide a detailed benchmarking service to review the performance of your business against hundreds of others in the same sector.

 

Needless to say, benchmarking is carried out without jeopardising confidentiality.

WHO CAN HELP YOU?

Our Agriculture Sector Specialists

Whether you are looking for a new accountant or simply would like a second opinion on your business, we offer a free initial face to face consultation on an absolutely no obligation basis with one of our industry specialists.

For further information contact one of our specialists:

Richard Skewis

rds@sowerby-llp.co.uk

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