Topics
How to spot BSE and what farmers can do to prevent it

How to spot BSE and what farmers can do to prevent it

DataHub

DataHub

Dairy Farmer Magazine

Dairy Farmer Magazine

Auction Finder

Auction Finder

LAMMA 2019

LAMMA 2019

New to Farmers Guardian?
Register Now
Login or Register
New to Farmers Guardian?
Register Now
New to Farmers Guardian?
Register Now

You are viewing your 1 free article

Register now to receive 2 free articles every 7 days or subscribe for unlimited access.

Subscribe | Register

How farmers can avoid tax pitfalls on extra Christmas income

Christmas brings lots of opportunities to generate extra income on farm but business owners need to be aware of the tax pitfalls.


Alex   Black

TwitterFacebook
Alex   Black
TwitterFacebook
Share This

How farmers can avoid tax pitfalls on extra Christmas income

Farms and estates looking to make some extra money from staging Christmas events must be aware of the tax pitfalls.

 

Christmas is a great time for making some extra income from activities such as letting land for seasonal attractions, staging a Christmas market, selling Christmas trees or other seasonal products and running events such as carol concerts.


Read More

Farmers could be hit by multi-million pound tax crackdown Farmers could be hit by multi-million pound tax crackdown

Key points to consider

  • The extent of your involvement – is it simply receiving rent for the use of land?
  • Is VAT chargeable for that use?
  • Will VAT be recoverable on any related costs incurred?
  • How will income be taxed in the hands of the recipient?
  • Could an event impact on Agricultural Property Relief (APR) which would otherwise be available for Inheritance Tax purposes?

But Sally Appleton, a partner with chartered accountant Saffery Champness, has warned businesses need to remember income from the activities should be declared and included in the appropriate section of a tax return.

 

Inheritance tax

 

She said: “Failing to declare such activity accurately could impact on the Inheritance Tax status of the business, or potentially reduce the opportunity to pay pension contributions.”

 

She added VAT status of seasonal activity was crucial.

 

“For example, a farmer selling Christmas trees will need to account for VAT on the sales price.

 

“Similarly, letting land which has been opted to tax to a third party for them to undertake a commercial venture will mean that the operator will need to pay VAT in addition to the agreed fee for the use of the land concerned.

 

Staffing

 

“Seasonal activity can also require temporary staff, and any staff taken onto the payroll, even if for just a few days, and no matter how they are paid, will be subject to normal PAYE rules and Real Time Information reporting.”

 

Farmers or landowners making arrangements with a third party for use of their ground or buildings need to consider the extent of their own involvement in the use, whether VAT is chargeable for the use, if VAT would be recoverable on costs and how income will be taxed.

 

She added events such as Christmas fairs may have an impact on Agricultural Property Relief which would otherwise be available for Inheritance Tax purposes.

Legal Helpdesk

TwitterFacebook
Post a Comment
To see comments and join in the conversation please log in.

Most Recent