Dairy Chitchat 4, an udder new thread.

But the thing is to have your capital allowances available already from previous jobs to fund it before tax and then the next item paid from cash flow can be carried forward. But you have to be on the treadmill already, so you are always one step ahead of the tax man.

Shouldn't the government first port of call be to give grants for concrete and drainage on farms to stop water runoff entering slurry tanks . This is a quick fix and would solve alot of slurry storage problems in a short period. After this they should look at capacity

You keep harping on about not borrowing and building out of cashflow, but I can't see why if it takes you that long to get to the finished product. If you had borrowed the money first day the lower building cost would probably have covered all the loan interest and you would have had a usable building in year one while keeping a good positive bank balance. Also, stop presuming everyone's situation is the same as yours, on a few occasions I've noticed that you expect everyone to do as you do because it works for you.

sure if we all had repayments to make on 230 acres, we would all be doing infrastructure work out of cash flow over a period of time but if you're not heavily borrowed it's more beneficial to the farm and one's sanity to get the infrastructure work done through a short-term loan as soon as possible.

We all have to see what suits our setup, the scale of the project relative to the amount of cash predicted to be available in the given year would prob determine if done from borrowing or cashflow really. There is prob a figure that could be worked out for each place to determine that if need be, percentage of turnover after costs or whatever in order not to put pressure on things.

Could be argued some did too much last year out of cashflow which then led the tax liability to put pressure on this years cash flow. When budgeting now I try to have the years tax owed there at the start of the year, doesn't always workout that way.

Tax, drawings, wages and to a certain extent contractors, vet, feed costs, etc can be determined at the start of the year with a +/- figure for each to allow a bit of leeway. Again putting a conservative figure in for income side and see what way things are likely looking for the year ahead.

If projects can be done in stages cashflow may do but if it saves on time / labour etc to do it in one borrowing could well be the way to go, the write off will be there either way, well once the profit is made to use it!

i see what you mean... but christ youd want to be borrowing some amount of money to burn up repayment capacity to such an extent that ya wouldnt be able to purchase land..were ya happy with your few bob from Kerry today??

Important part of the above is 'we' a family dairy business where theirs a couple of sons/father involved is a totally different animal to a one man band, working away by himself, when your largely working alone in the springtime good facilities are needed, and cant really be done in stages of years/when cashflow allows

To save paying tax you have to borrow to kill the tax bill a year like last say youve 100k profit taxed at 50 percent and you build a parlour for 100k you pay 42.5k tax as only 15 k was tax deductable.So if you borrowed 700k and built tanks sheds machinery if you needed them then youve ni tax at 50 perent.The items you borrow for to avoid paying tax must make you money as well as a tax saving eg slurry storage fert value staying compliant avoiding fines.

Don’t feel bad Kevin, I’ve taken a very modest wage for a long time to build up the farm which in turn impacted us going for a mortgage, we were getting ran through the mill to get a mortgage. in the end we decided to go with out one because we were would have had to spend 50k extra on air to water system, solar panels and mechanical heat recovery to get a high ber so we could get a lower interest rate

Didn’t intend on doing it in 2 years but with the good milk price we put the money into it. We did take 2 personal loans between us aswell

So you built a house from farm profits in 2yrs surely u have a huge tax bill as to generate that surplus tax it has to be pure profit

Being nosey, what did yous do with the house yous had done up on the home place?

the building I’m on about was built on to it. House /extension has everything in it bar kitchen which is In existing house. 4 new bedrooms- one un suite, up stairs main bathroom, downstairs toilet, sitting room, utility, office, play room

Obviously they've worked hard to achieve what they've done but the economies of scale do come into to it as well, esp when it comes to doing projects out of cashflow

It's not nailed on yet, but if this weather prediction comes to pass, it really will be the icing on the cake re mother nature letting us know she's the boss