Small farmer starting out

Dot Cotton

Hi everyone

Last summer I bought a few heifers & have kept them all winter in the shed.

I'll be hoping to sell them to the factory directly this summer.

Along with this payment & my first single farm payment last year I have no other income from my few acres.

My husband works full time & I am at home with the kids. We have an accountant for my husbands business but he's not overly familiar with farm accounts.

Can anyone advice me do I need to declare this income as we are married (which I assume this is the case) or what's the story?

Sorry maybe this is a stupid question but I'm only starting out after inheriting a few acres so I'm new to the paperwork side of farming!

Thanks!

Buford T. Justice XIX

Dot Cotton wrote: »

Hi everyone

Last summer I bought a few heifers & have kept them all winter in the shed.

I'll be hoping to sell them to the factory directly this summer.

Along with this payment & my first single farm payment last year I have no other income from my few acres.

My husband works full time & I am at home with the kids. We have an accountant for my husbands business but he's not overly familiar with farm accounts.

Can anyone advice me do I need to declare this income as we are married (which I assume this is the case) or what's the story?

Sorry maybe this is a stupid question but I'm only starting out after inheriting a few acres so I'm new to the paperwork side of farming!

Thanks!

Welcome to farming and to Boards:)

Yeah, you'll need to declare any profit made to the taxman but only the profits. Any items spent on the farm or the cattle can be set against any income from sales and EU payments so while you are developing the farm, you will have a good few deductions to set against sales.

Muckit

Hi OP. Yes is the simple answer! It doesn't matter how big or small the farm is, it all has to be declared!

But it's not a big issue.... if you keep on top of things! It is just a pity that your husband's accountant isn't familiar with farming, as he could easily submit your returns aswell. You may have to find yourself a farm accountant if he is not comfortable making the returns for you.

My bit of advice, for what it's worth, is to get yourself organised with a few bits of stationary. Perhaps you have these or at least some of them in place already?

Expenses: A box lever arch file and a simple ledger book. Put your receipts into the box as you buy or pay for things. Then write a corresponding entry in the book outlining the date, brief description of item, where it was bought and the cost. Start a new page each month. It's amazing all the bits that you will buy, even on your small holding. If you use it on the farm, put it in.

Income: You should have got a summary sheet from the DAFM at this stage of all the payments (BPS, ANC etc) you got for 2016.
Cattle sales - Keep all mart dockets for stock bought and sold. You can write these items on a separate page at the front or back of your ledger book.

You will put all these into the box and can hand these to accountant when the time comes.

Keeping a farm diary is a very good idea. Solely for farm entries. This really is a secondary back up. Write in the day to day things that are farm related, what work you got done (contractors etc), what it cost and what bits you bought (at co-op, farm store). You could have it stuck in a kitchen cabinet and pull it out and fill in a few bits when you get a chance at night when you get a quiet moment.

I hope this is of some help.

lakill Farm

under your spouses form11 return you will need to file the farming activity

so in 2016 it will all be outgoing. purchase of animals , feeds grass, meal, vet etc etc. you can offset loss against husbands income, called a s381 loss.

in 2017 the sales income from the heifers and any other expenses will need to be worked out and either offset on s381 or taxed

you will also need to consider if you purchased any fixed items and capital allowances . the offset of a capital allowance against your spouses income in 2016 is s392

Dot Cotton

Wow thanks guys for such detailed information! I'll speak to the accountant & see what he says. I can always use my parents farm accountant if needs be.

Thanks again so much & for the welcome!

nhg

Important to pay a Voluntary PRSI Contribution if you are not already covered for this elsewhere for when you reach Pension Age

Dot Cotton

nhg wrote: »

Important to pay a Voluntary PRSI Contribution if you are not already covered for this elsewhere for when you reach Pension Age

Thanks nhg, I have that sorted already. Great to get the heads up on it, thanks!