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Six things about farming no one tells their accountant

David Missen takes a light-hearted look at life beyond accountancy from the point of view of an ex-practical accountant.

  1. For years I have asked clients about the existence and extent of cash sales and watched them solemnly shake their heads and regretfully advise that “no one pays cash nowadays – not like it was for Dad/Grandad”. Whilst this may well be true for large scale agribusinesses it is not necessarily the case for those producing goods at the retail and muddier end of the market. With the demise of the local bank branches, and living miles from the nearest cashpoint, sales of hay and eggs conveniently replenish the wallet (and for the benefit of any tax inspectors reading this they ARE recorded in a cash sales book and the hay bales ARE reconciled to the contractors baling invoice. Reconciling eggs to hens is a bit trickier…..) – and quite how one issues an invoice for the transaction where a £20 note is popped through the letter box with the words “I helped myself to some hay “written on it in lipstick would be a good question for the MTD team.
  2. New machinery is expensive and cannot be justified on business grounds. Old machinery is unreliable and will break down at the most difficult time/place possible. It is also backbreakingly heavy to set up or to mend when it breaks down. The fact that it looks quaint and attracts comments along the lines of “…my grandfather did 60 acres with one of those every year of his life…” do not compensate for the backache and skinned knuckles. Although it does go some way to explaining why Grandad died at the age of 52.
  3. Even on a small farm and using contractors for major operations, the level of capital required is mindboggling. We know about this in the abstract of course, but clients (and accountants) tend only to notice the fluctuations on a year-by-year basis, forgetting that for the first 18 months of farming, money only ever flows in one direction, and at some speed.
  4. Doing anything with the RPA is tortuous. Specifically, they are fond of sending out paper forms (which disable the online option) at the same time that they advise on how good it is to file online. The problem can only be resolved by a phone call which can happily while away a morning. The message that “your call is important to us” starts to sound a little unlikely after 20 minutes – which coincidentally is about as long as the battery will last on a cordless phone, so the call fails just as you reach the front of the queue. As a general rule with the RPA, if it can go wrong, it will. When they eventually do send you some money it will come with no explanation and will bear little resemblance  to what you are expecting. When they send you an explanation some weeks later it will be incomprehensible but by that stage you will have lost the will to live, let alone reconcile.
  5. When you need to do something outside it will always rain, or on the rare occasions when it isn’t raining it will be so hot that you cannot sit on the tractor seat or touch metal without gloves.
  6. There is more inter-farm cooperation than we realise, and without it, life would be very difficult. As accountants we know about the more formal arrangements which involve paperwork. There are also many more informal ones along the lines of “would you like me to pop over and sort that thing out with my teleporter and then perhaps you can give me a hand with a little problem I have that requires two tractors”. No tax impact, but everyone’s life runs a bit more smoothly.

As accountants we all know that most farmers would be better off in cash terms if they “just sold up and spent the day watching TV”. As I suspected, when clients told me that I was better off outside accountancy because “farming is where the real money lies” they may just possibly have been pulling my leg – but at least  most of  them don’t have to put up with the plaintive moans of the spouse that “I didn’t sign up for this – I thought I had married an accountant".

David Missen, Consultant to Larking Gowen

Farming and Rural Business Group, September 2017

© David Missen