In today’s volatile environment, Cashmanager RURAL is a crucial tool to enable your accountant to estimate provisional tax with confidence – meaning no nasty surprises or big tax bills for you.
RURAL CA Ltd Director and Chartered Accountant, Lawrence Field, believes estimating is key in today’s environment, when farm incomes can fluctuate hugely from year to year.
No one likes paying tax and it’s even worse when a big terminal tax bill comes as a surprise to you. Conversely, a large tax refund can be almost as bad as a large bill, because that’s money you could have used more effectively in your business.
Working with your accountant to re-assess provisional tax, through budget revision, is critical to achieving a goal of zero terminal tax.
With a tough season, particularly for dairy farmers, cashflow will be tight and a system that allows your accountant to safely estimate provisional tax is vital.
“We are dealing with huge drops in income. Some accountants are reluctant to estimate because there can be penalties if we get it wrong. So if you’re going to do it, it’s important to do it accurately.”
Field says the safest and most accurate way of estimating provisional tax is from a revised cashflow, which can be done using Cashmanager RURAL.
“At any stage during the season this will give the best estimate of farm operating surplus. Any tax adjustments, like depreciation or changes in stock numbers, can be done manually or through the Cashmanager RURAL Performance Summary (EFS) report – that’s a really good one page summary.”
Using the Cashmanager RURAL online dairy forecaster can also help keep figures up-to-date, as both you and your accountant have access to the latest dairy company advance rates, updated with the click of a button.