Livery yard owners- tax returns

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horsehappy

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Hi all

I own a new livery yard and need to send my tax returns in- yawn!

I've kept good books of income and outgoing and receipts but struggling to work out how much of what we can write off against tax- ie buying new towing vehicle? Machinery? Utility bills (as house and yard are on one bill?) etc

I've spoke to an accountant and they seem really vague would I need a specific farm/rural accountant?

Any advice greatly recieved :)
 
Hello,

I have recently joined BDO, a national accountancy firm, in the indirect tax department. You should be able to ask any accountant/tax advisor for the specific advice, however you are probably more likely to find advisors who deal with equestrian/farming more often in a larger firm I would think.
I am working with a partner on a tax case for an equestrian client currently.
Let me know if you'd like me to put you in touch with one of the managers in my team to enquire about advice :)

Best - Nicole

Nicole.blyth@bdo.co.uk
 
I'm self employed and my accountant said that I can claim for stuff I use in my profession, i.e. clothing, car/mileage, meals "on duty" - in short, ANY expenses that you might incur as a result of your "business".

I would have expected any accountant to be able to help you claw back as much as poss from the IR TBH; this surely is bread-and-butter stuff to any accountant? Irrespective of where their specialism lies???

But perhaps I am being unduly judgemental???

It would be to your advantage OP I would suggest, to consult an accountant who IS experienced in this sort of work; you don't want to lose any opportunities you can to claim back anything to which you're properly entitled do you??? A good accountant should help you do just that, and you can also offset their consultation fees against your tax return too!

Get yourself someone who's up to the job...........
 
any accountant should be able to do this. It is very simple work for an accountant, hardly rocket science. Has the accountant prepared your accounts? if not he may have been vague as he didn't have the accounts to hand or know what allowances were required.
You are talking about 2 seperate issues. Firstly capital allowances ie allowances on the cost of buying your machinery, say for eg a quad bike/trailor etc.
Don't be put off by the fact this link comes from the HMRC web site. It will give you a bit of an explanation about capital allowances on plant and machinery.
http://www.hmrc.gov.uk/capital-allowances/plant.htm

The second issue is the apportionment between business and private use. This will affect your utility bills, your vehicle and anything else that has dual private and business use. It may also affect any loan interest that you pay. You will need to apportion everything between business and private use. As a general example take a car. If the mileage was 10,000 a year and you had kept a mileage log showing 4000 was for the business and 6000 private it would be easy to apportion the petrol, insurance etc on that basis. If you haven't kept records to that extent it will be a case of making a reasonable guess and make sure you keep a record as to how you arrive at the guess. Same goes with everything else electric, water etc etc. It is supposed to be simply based on fact so before going back to an accountant try and work it out yourself as he will simply ask you questions so he can work out how to apportion it and it will be a lot cheaper if you have already done it.

Also look at your yard. How many are liveries and how many your own or family horses? You may be able to apportion the expenses on a numerical basis eg half your own horses and half liveries or some other basis if that is more appropriate. Same with your lorry/trailor. Is half the use taking your own horses out or it is solely part of the livery service.
I would make notes as to exactly how you apportion everything and why so that if there is any comeback from HMRC about your accounts you have the answers.

Don't forget that items on vet's bills, farriers bills etc for your own horses will need to be excluded from the accounts. This is very important and something HMRC could easily pick up on. For example if they see a set of shoes for a livery horse they will also expect to see an invoice to the livery owner. If you claim for a high percentage of electricity for a school they will expect to see receipts for the hire unless it is in the livery charge. Those sort of things and so there will be quite a lot of apportioning in your sort of business attached to a house.
This is a bit general as I don't know your situation. Having worked everything out in your own mind you could then go back to an accountant with definite figures. I'm not sure if you were planning on doing your own accounts/tax return but if this is the first year it may be worth having an accountant do them and making sure you can relate his figures back to your records so that you can see what adjustments he has made. That way if you want to do your own in the future you will have an example of how to claim each expense and how to deal with the income.
 
Some great advice thank you so much :) as we lease the yard and property will we only be able to offset the yard side of it or would the house be part of that- could it be that given the nature of the business we need to live on site?
 
You can use part of your house bills against it becaus you need to wash your work clothes, if you have a room you use for an office for invoicing etc.....also make sure you put the right amount of tax away each month.
For my self employed dad I put 25% of weekly earning.

Anything that is brought and used for your business can be put down against tax
 
When we had a pub, if I remember rightly our accountant used to say 10k for normal living expenses for us, the rest for the business - but utilities etc in a pub are enormous, like 1k a piece for rates, water, electric, oil etc per month
 
horsehappy said:
Some great advice thank you so much :) as we lease the yard and property will we only be able to offset the yard side of it or would the house be part of that- could it be that given the nature of the business we need to live on site?
Click to expand...

the house is the private residence of you and your family. Only the proportion of expenses attributable to the business use of the house would be allowable as a deduction. That may be nothing if you have an office, perhaps a washing machine etc out in the stables or a deduction may be appropriate if you have say an office in the house or if the house is used for any other use in the business.
 
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