Agriculture and Farming Accountants

The modern agricultural industry comes with numerous challenges beyond the cultivation of crops and raising livestock. At Mercian Accountants, we have extensive experience in supporting clients in this field – including farmers, landowners, and agricultural businesses. We understand the unique needs and challenges faced by the farming landscape, making us a trusted partner for financial success. If you’re looking for agricultural accounts and tax support to optimise your estate’s profitability, please contact us today, or carry on reading to find out more.

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Agricultural Business and Tax Advice

We provide customised support and advice tailored to the specific needs of your agricultural business and family dynamics, aiming to enhance profitability and foster growth. Whether you require assistance with future planning or are seeking bank finance that necessitates financial projections, we are here to help. Our comprehensive range of services includes:

Accounts Preparation for Farmers

Thanks to our expertise in the agribusiness sector, we offer comprehensive financial solutions tailored to your needs. By taking the time to understand your farming business and its key drivers, we can produce detailed annual accounts in a format that suits you. Our accounts and tax teams work closely together to ensure that your accounts and tax returns demonstrate asset ownership and profit allocation in the most tax-efficient manner.

Our experts carefully review profits and losses for both the business and individuals, taking into consideration agricultural-specific and other tax considerations. These include:

Capital allowance claims: so that you take full advantage of available capital allowances, optimising your tax position.
Farmers averaging: this can smooth out fluctuations in income and potentially reduce your overall tax liability.
Loss relief: loss relief provisions may apply, providing opportunities to offset losses against other income or carry them forward to future years.
Herd and flock elections: we analyse the implications and benefits of herd and flock elections, helping you make informed decisions regarding tax planning and compliance.

We use a range of specialist software and accounting packages, enabling us to extract data from various platforms efficiently.

Accounting Software Advice and Training

If you need guidance on selecting and implementing specialised software, we can help – ensuring that you have the right tools to effectively manage your financial data, e.g., we can integrate your budgets, records, and movements into your accounting software, so you can monitor performance and make informed decisions based on real-time data.

Our experts also provide training sessions to ensure you and your team are proficient in using the chosen accounting software, so you can accurately track and analyse your financial information. We offer reduced licensing fees, too, on a range of reliable software packages for farmers.

Agricultural Business Planning

To help you establish a clear roadmap for your agricultural enterprise’s future success, we can assist in preparing business plans, budgets, forecasts, and cash flow projections. In alignment with your budgets, we will provide valuable insights into your business’s financial performance and facilitate proactive decision-making. We can also offer guidance on optimising your business structure, ensuring it aligns with your goals and provides the most favourable operational and tax advantages.

Tax Planning for Estates

Our tax experts will develop comprehensive strategies for you and your family, accounting for the context of your business. Get in touch today to see how we can minimise your tax liabilities and maximise wealth preservation, providing advice and planning for:

Capital Gains Tax (CGT): if you’re selling or gifting property, we will consider tax reliefs such as principle private residence relief, business asset disposal relief, gift relief, and rollover relief. We can also look into the use of spouses, structuring, trusts, and timing of transactions to reduce or delay tax liabilities.
Corporation Tax: by incorporating all or part of your business, you can pay lower corporation tax rates, especially if your company has substantial borrowings. There is also the opportunity to reduce your tax liabilities if you qualify for Research and Development (R&D) relief (e.g. if your farming company is introducing different feed/antibiotics or growing different varieties of fruit in a particular climate).
Income Tax: if your business incorporates, you could get greater flexibility in determining how much income you receive from the company, regardless of its profit levels.
Making Tax Digital (MTD): since April 2022, all VAT-registered businesses must follow MTD rules – which means keeping digital records and using MTD-compliant software. We can determine whether your farming business needs to register, provide assistance with registering, review your current software, and provide training and guidance.
Stamp Duty Land Tax (SDLT): farming businesses can experience substantial financial burdens from SDLT. We can optimise your SDLT position by considering rules around property transfers into or out of partnership (especially if the partners are not from the same family and don’t meet the connected persons criteria) and/or for acquiring farm properties that include residential elements (e.g., multiple dwellings relief).
Value Added Tax (VAT): assessing the benefits of VAT registration (or deregistration) and determining whether HMRC schemes such as flat rate or annual accounting would be beneficial for you. We can assist in completing VAT returns, ensure land development compliance, review partial exemption calculations, and advise on VAT for acquisition and sales, whether national or international.

The Benefits of Incorporation

Along with reduced income tax and corporation tax relief, incorporation also provides the benefit of limited liability protection. This is especially valuable when engaging in high-risk activities beyond typical farming operations. And, for the family, it will ensure a smooth transition for the next generation into the business, whether as directors or shareholders. Our services include:

Estimating tax and cash benefits: and determining which assets should be transferred into the company.
Business structure advice: on whether to retain a portion of your business outside the company, such as incorporating contracting services while keeping traditional farming activities within the existing sole trade or partnership.
Facilitate company formation: by working with our in-house legal team (or collaborating with your legal advisors), to draft the required agreements.
HMRC interaction assistance: regarding VAT and PAYE obligations.
Considering tax efficiency: covering aspects such as salary versus dividends, family and company tax planning, property matters, pension arrangements, and borrowing requirements.

However, incorporation can come with its downsides, e.g., any income earned by the company belongs to the company itself, unlike in sole trades or partnerships where it belongs to the proprietors.

Farm Succession Planning and Retirement

We assist in developing succession plans, helping you navigate the complexities of passing on your agricultural business to future generations, ensuring a smooth transition and continuity. This will also help to minimise your inheritance tax liabilities. If you work with us, we’ll explore the following between you and your family (often spanning three generations):

Lifetime succession or surrender: of an Agricultural Holdings Act (AHA) tenancy
Contract farming agreements: or share farming agreements
Balfour planning principles: for a tax-efficient business structure
Lifetime gifts: of land, property, or shares (sometimes into trusts)
Inheritance tax: to mitigate potential tax liabilities on death
Review of your Will: from our in-house team or collaboration with your legal advisors
Trust review or set-up: we can help you plan ahead for your children’s education and/or inheritance planning by reviewing existing trusts or creating new ones
Retirement plans: and pension arrangements

Looking for an Agricultural Accountant?

With our expertise and dedicated support, we strive to empower your agricultural business to thrive, achieve financial stability, and secure a prosperous future for both you and your family. At Mercian Accountants, our team is committed to providing continuous support and advice, addressing any financial concerns, and exploring opportunities for improvement. You can message us through our online form, call 01743 562430, or email hello@mercianaccountants.co.uk.