Plan Your Farming Future: Join the Scottish Farm Business Survey
Participation in the Scottish Farm Business Survey can help you with your annual scrutiny of the financial trends in your farm business, both in terms of immediate profitability, but also in term of its overall net business worth. This is particularly important in light of recent inheritance tax changes if you are considering succession in your business. It will also help you think about what you may need to do to address existing profitability and the longer-term viability of your business. This valuable insight will help your family farming business make improved decisions for the future.
As a small business, it can be hard to keep on top of your annual and your long-term business financial management. There are many other things to attend to, and it’s easy to put the difficult work of future business planning off to get through the day-to-day list of tasks. Business planning can be hard work and succession planning potentially difficult requiring family conversations about death and money.
Recent changes to inheritance tax in the autumn budget to both Agricultural Property Relief (APR) and Business Property Relief (BPR) however, should now bring this strategic business planning right to the front of your business mind. There is an entire range of things to consider but two parts of the financial picture are:
- Understanding the value of what you own.
- Understanding the profitability of your business and the trends within that over time.
The farm business report that you get back from us for your participation in the survey includes a net worth calculation of all the assets you have within your business. This can function as a starting point to fully assess the value of what you own. This will help in discussions with your family, advisors and professionals as you go through forming a succession plan.
The power of being able to look at your business on an annual basis and see up to three-years of trends in input costs or your output, can help focus your mind on your farming system and business viability. You can scrutinise its performance over time and see robust financial evidence to help you make better business management decisions that will have long-term impact. Turning your farming business around takes time, and indeed in any business it can take five years before meaningful change delivers cash positive results.
Annual scrutiny of your financial position beyond your set of tax accounts can also act as a stabiliser in business discussions and can demonstrate to family business partners that you are on the right track, with independent evidence to back up that assertion. The twin impact of tax changes and changing support payments and looking at trends over time can help you see that impact in black and white and act as a motivator for planning your family farming business future.
Your participation in the survey is voluntary, and Scottish Government do not know whose data is whose, as your data is anonymised. They use this data from real farm businesses to model the economic impact of policy change. This gives insights into what may happen as a result of changes to support payments in various agricultural sectors.
We ask you for a digital record of your receipts and invoices from your farm accounts, and about two hours of your time to answer questions. You are allocated to one of the members in our team, and they take your anonymity seriously.
Its free to join, and you get back in return:
- The farm business report: includes a net worth assessment of the assets in your farm business completed at your financial year end. You can use this to help guide any succession planning discussions you are having with your accountant. You also get a set of detailed management accounts that allows you to compare your costs and productivity year on year for up to three years.
- A carbon audit in Agrecalc: for which there is a growing number of uses. You will receive a calculation report and a short mitigation report which is suited to your farm type. These reports have are verified by RPID as being sufficient for Whole Farm Plan compliance purposes, which means you do not have to pay for one.
- The Individual performance benchmark report: this comes out at the end of March sometime after your accounting year end. However, it gives you the opportunity to compare your farm’s figures to other businesses like yours, so you have an external comparison. This can reassure you that you are on the right track or give you something to aim for in any changes that you need to make to your system.
You can find out more about the Scottish Farm Business Survey here. Or email ScottishFarmBusinessSurvey@sac.co.uk to take part.
Sascha Grierson, Head of Agri-Economics unit, Sascha.Grierson@sac.co.uk
Unearthed is the exclusive SAC Consulting members' monthly newsletter. Unearthed offers insights and tips from our experts on what we think is in store for farming and crofting in the coming months in order to protect and enhance your business.
Posted by Unearthed News on 13/12/2024
