Budget Planning

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Max Sealy (Chippenham)

With most people now on a 31st March year end, most of the options for tax planning for the year ending 31st March have now passed.  Clients who did an 8 to 11 month actuals plus budget have been able to make suitable tax planning decisions.  For some dairy farms, despite the fall in milk prices, the yearend has seen some strong trading profits.  With reduced capital expenditure because of cashflow and high tax bills in 2023-24 this will result in relatively large taxable profits. 

Many people will have paid relatively large amounts of tax on account, and for most dairy and arable farms, there is the potential that they are heading for an overpayment in July based on their current figures. 

If you averaged 42 or 43ppl milk price last year, how much will milk price need to rise in order to do the same again this year?

For an arable farm selling grain out of store last year, compare the price of what you have left in the store or what is available to sell now to see what effect this has on the cashflow.  

Now is an excellent time to get a budget done for the coming year including a cashflow forecast so that tax planning can be put immediately into place.  This should, of course, be done in conjunction with your accountant.  Having up to date figures will make for a useful meeting between all parties to decide on the next strategy.

Obtaining sources of working capital is not straight forward at the moment e.g., overdraft or credit facilities etc., and therefore, it is really important that all businesses look ahead at what their requirements might be for the coming year and consider what options can be put in place.

Contact Max at maxsealy@fcgagric.com or your local FCG Office, for help with budgeting and get in control of your finances.  If you fail to PLAN you will plan to FAIL.

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