The effect of this year’s unseasonably warm weather on harvest patterns is likely to have a knock-on impact on farmers’ cash-flow. Most farmers will have secured the winter barley and oilseed rape by now and will have started to harvest the spring barley crop. In stark contrast to last year’s harvest, this season’s heatwave means farmers will be concerned about a potential loss of yield.

A reduction in yield, although prices are holding up, is likely to affect profitability and cash-flow. Farmers will be relying on cereal crops to supplement winter fodder and with the shortage of grass to make silage, additional feedstock may need to be bought in. As cereal cheques may not be as bulky as they were last year, it’s an important time to take stock of your financial position.

Sole traders and partnerships currently make tax payments on account based on the recent performance of the business. For many, this will be based on the last set of accounts included in your 2016/2017 tax return.

If you believe that there has been a variation in the business performance since your annual accounts reported in your last filed tax return, the tax payments currently being made on account may not necessarily be accurate. From a cash-flow perspective, it is good practice that you are not paying too much tax on account. To avoid this, it is important to keep your accounting information up to date and to have your accounts prepared well in advance of the 31 of January annual deadline.

Those with a 31 May year-end may not be reporting and paying tax on this year’s harvest (31 May 2019 accounts) until a tax return filing date of 31 January 2021. To avoid a mismatch, preparing accounts soon after 31 May allows early calculation of the tax due on the 31 July and 31 January tax payment dates. This helps to match profitable years that return good cash-flow with years when higher tax bills are due.

Keeping up-to-date accounting records for your business is good housekeeping.  As well as making sure that your tax payments are based on current business performance, up to date records will help your business in the move to ‘making tax digital’. ‘Making tax digital’ will start to impact businesses who trade above the VAT threshold in April 2019.  The initiative is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and to keep records up-to-date.