Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner. Facebook Messenger An icon of the facebook messenger app logo. Facebook An icon of a facebook f logo. Facebook Messenger An icon of the Twitter app logo. LinkedIn An icon of the LinkedIn logo. WhatsApp Messenger An icon of the Whatsapp messenger app logo. Email An icon of an mail envelope. Copy link A decentered black square over a white square.

Farmers warned of Christmas diversification tax surprises

Post Thumbnail

Farmers and crofters hoping to earn some extra cash over the festive period have been urged to ensure any diversification does not land them with a big tax bill.

According to Susie Swift from accountancy firm Saffery Champness’ Inverness office, festive diversification ventures which are not directly related to a farmer or crofter’s main business activity could have tax implications.

Festive farm diversification ventures include:  letting land for winter wonderland type attractions; operating a Christmas market or fair; selling Christmas trees, holly, logs or other seasonal products; and charging rent to someone else to sell Christmas trees.

Ms Swift said:  “Whilst the income from such activities obviously needs to be declared it is important to ensure that it is included in the appropriate section of the tax return.

“Failure to do so could have adverse effects on the Inheritance Tax (IHT) status of the business and its assets, or reduce the opportunity to pay pension contributions.”

In addition, farmers will need to account for VAT, if they are VAT registered, on the sale of any festive goods.

“Similarly, letting land that has been opted to tax will mean that the operator will need to pay VAT in addition to the agreed fee for the use of the land concerned,” added Ms Swift.

For non-VAT registered businesses, she urged farmers to be aware that any additional income could push their business over the VAT threshold.

She added:  “Christmas events, if run in-house, may require additional temporary staff.  Remember that staff taken onto the payroll, however temporary, and despite how they may be paid, will be subject to the normal PAYE regime including Real Time Information reporting.”

Johnston Carmichael partner and head of agriculture Robin Dandie said farmers should ensure that their insurance covers the new business venture.

“Any diversification from the core business requires some thought and planning to maximise the possible returns,” he added.

“The diversification needs to be regarded as having potential to add to the overall profitability of the business and then any tax saving opportunities can be reviewed.”