Latest News

Dairy Women's Network - Navigating Dairy's New Landscape: 7 Steps to Surviving the Payout Challenge
Katrina Thomas

Dairy Women's Network - Navigating Dairy's New Landscape: 7 Steps to Surviving the Payout Challenge

This is a recorded webinar/blog supplied by DWN and CMK Chartered Accounts (18 August 2023)

Supplied by Dairy Women's Neywork

The dairy industry has been under immense pressure over the last 18 months and has faced challenges on many fronts including compliance and increased costs such as feed, fertilizer and fuel. The announcement of a drop in this season’s forecast payout could be the biggest challenge that farmers face over the next period of time.

Average farming costs have risen to an average of $5.25 for a farm owner and bank margins have risen and therefore the cost to borrow money. The average farmer has $28 of debt per KgMs and pays $2.38 in interest per KgMs. If lower payout levels stick around then we must take action now to make our businesses are resilient and fit for the future.

#1 - Know Your Numbers

#2 - Know your Statement of Position

#3 - Are you getting bang for your buck?

#4 - Budget Budget Budget

#5 - Talk to your Bank

#6 - Monitor the plan

#7 - Review your taxes

As a farmer you are in the enviable position that there are a number of tax planning opportunities that are available to you and as such you should be using them.

The most obvious tax planning opportunity is the Income Equalisation Scheme and below is an example of how it works:

You are trading through a company and have a surplus of $400,000. Tax payable on this would be $112,000.

If you do nothing over the next twelve months your tax will be as follows:

  • Terminal Tax $112,000
  • UOMI $7195
  • Provisional Tax $117,600
  • Total $236,795

If you make a $260,000 income equalisation deposit your tax liability will be as follows:

  • Terminal Tax $28,040
  • Provisional Tax $29,442
  • Total $57,482

This is a total tax saving of $170,313 over the twelve-month period. You will also save on interest as the tax payments haven’t been paid and you will be receiving interest on the funds invested at Inland Revenue. In reality for some New Zealand dairy farmers there may be no tax payable at all during this time. Tax Management (both in timing and the dollars involved) is vitally important and if your Accountants are not reviewing your taxes then please do not hesitate to give us a call.

Are you prepared to navigate the challenges ahead and ensure the financial resilience of your farm business?

Our team at CMK Accountants are here to guide you every step of the way. From understanding your farm’s financial health to optimising tax strategies, we’re dedicated to helping you weather the ups and downs of the dairy industry and build a secure future.

Contact us today for a free review of your business and take the first step towards a stronger, more resilient farming business.

Previous Article Feed for Thought Podcast with Pioneer Brand Product hosts Ian Williams and Matte Kirk
Next Article NZ Young Farmers and Rural Support Trust join forces to enhance wellbeing
Print
1164

Name:
Email:
Subject:
Message:
x

More news...

FMG Spot Check Roadie with Melanoma New Zealand

FMG Spot Check Roadie with Melanoma New Zealand

The FMG Spot Check Roadie kicked off last year and visited four locations around the country, for the full results.  And this year they're heading out again with their partners Melanoma New Zealand. If you've got a spot you're concerned about, come and see them to get it checked and receive life-saving information to help you and your family look after...
October 20, 2023 0 Comments
Surfing for Farmers recognised as Rural Champions at B+LNZ Awards

Surfing for Farmers recognised as Rural Champions at B+LNZ Awards

The Beef + Lamb New Zealand awards were held last night in Christchurch. The judges said it was hard not to give Surfing For Farmers a perfect score.
October 20, 2023 0 Comments
A Call Away - Shepherdess talk to North Canterbury RST representative Jen Le Pine

A Call Away - Shepherdess talk to North Canterbury RST representative Jen Le Pine

Long-time sheep and beef farmer Jen Le Pine, 50, fills her cup with volunteering in the Cheviot community. She’s an area representative for the North Canterbury Rural Support Trust, using her personal experience to help farmers like her navigate tough times. She chats with Shepherdess about the power of a listening ear and how locals help keep the Trust going strong.
October 16, 2023 0 Comments
El Niño Watch - Podcast Series

El Niño Watch - Podcast Series

NEW WEEKLY PODCAST!  Join forecaster Phil Duncan & Hawke’s Bay farmer & AgriHQ senior analyst Suz Bremner every week as they track latest developments with the El Niño weather pattern & what this means for you.  
October 13, 2023 0 Comments
Losing a loved one to suicide

Losing a loved one to suicide

Losing someone to suicide may leave you with lots of questions that are difficult or even impossible to answer.

October 11, 2023 0 Comments
Three great tips from Lance Burdett

Three great tips from Lance Burdett

Asking for help is a sign of true courage and strength, a true hero. It takes courage to admit that you don't have all the answers and that you need the support of others. Seeking help from a trusted friend, family member, or professional can make all the difference.
October 11, 2023 0 Comments
Surfing for Farmers 2023 - 2024 Season

Surfing for Farmers 2023 - 2024 Season

The new season is fast approaching, keep your eyes peeled for your regions start dates and times ...

Regional NAIT Support Sessions throughout New Zealand

Regional NAIT Support Sessions throughout New Zealand

Need a hand with NAIT or TBfree? Then checkout the closest NAIT support sessions near you.

New Drought/Dry Forecasting Tools

New Drought/Dry Forecasting Tools

A new tool created by NIWA in accord with MPI provides useful weekly and 35-day outlooks for dryness and rainfall based on meteorological data.

Rural Support Trust NZ

With thanks to our principal sponsors
 
Thanks to our Time Out Tour partners