Top tips for a stress-free year end

Apr 25, 2023

As we enter the new tax year, it is important to plan ahead by keeping your accounts in order. This helps prepare you and your accountant for a stress-free year end. 

Leaving your accounts until the last-minute could result in delays as your accountant chases the inevitable missing information, as well as inaccurate reporting and ultimately, paying the wrong amount of tax.

But with some simple preparations, this can be avoided according to Ian Parker, Director of Whitley Stimpson. 

By ensuring all transactions are documented and all purchase codes are correct throughout the year, a great deal of time and effort can be saved in producing and submitted the farm’s final accounts. 

Ian said:

“We know farmers are incredibly busy when the tax year is coming to an end, either preparing for lambing or calving or drilling spring crops but setting aside a bit of time to ensure the accounts are in order will save a huge amount of time and stress in the long run. Neglecting to do this could store up real headaches for both farmers and accountants. If information is missing or incorrectly entered, producing the final accounts becomes a much more difficult task and can even result in penalties for late submission or inaccurate accounting, which can lead to paying the wrong level of tax.”

To ensure this doesn’t happen, Ian recommends a number of checks farmers can do before submitting accounts to the farm accountant. These include: 

Review account code transactions

Ensure the codes used in your accounts are consistent can be very difficult for an accountant to assess the accuracy of transactions if this isn’t the case. If they have to spend time unravelling these, it could cost both time and money. 

Ensure stock values are correct

This is another common issue farmers can struggle with. It is essential you provide accurate calculations for the areas of crop growing or livestock numbers by age category. And beware of double counting. When crops leave the farm around year end, for example, there is a risk they are included in the closing stocktake and, in the debtors, when receipts are reviewed after year end. 

Produce all documentation for unusual or one-off receipts and payments

All transactions must be documented and evidenced, so be sure to include all documentation for one-off receipts and payments, otherwise your accountant will have to chase you. 

Provide copies of any new loans or hire purchase agreements

As many farms have a mixture of borrowing agreements, documentation around new facilities must be sent to your accountant at year-end. 

Distinguish between new and repair expenditure

Expenditure on buying new items or repairing existing items, such as fencing, is treated differently. So, make sure you inform your accountant which bracket certain outlays fall into. 

Ensure depreciation values are correct

With supply side issues affecting farm machinery at the moment, big ticket items are holding their values well, meaning depreciation rates are impacted. Providing insurance values for tractors and other large plant will help your accountant set depreciation at the right level. 

Provide evidence regarding private proportion adjustments

This particularly applies to private mileage and farmhouse costs. Provide a split of mileage used for the business and private mileage. 

If the farm business is run from the farmhouse, expenditure around council tax, energy use, and other expenses for business tax relief should be calculated. However, this can be a grey area and one you might need your accountant to support you with. If so, get in touch with them early so it doesn’t delay filing your final accounts. 

Ian added that although this might sound like a long list, working through it in time for year-end is likely to be far less time consuming than dealing with multiple enquiries from your accountant. 

“If you get this in place in time for year-end, you will be able to relax once it’s done,” he said. “But if you leave it for your accountant to sort out, be prepared to spend a lot of time going back over the year’s transactions and trying to remember what each one relates to.”

For assistance on getting your year-end accounts in order, contact Ian on (01295) 270200 or email 

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