FARM FINANCES

Te Awamutu Courier, Volume 62, Issue 4402, 14 March 1941, Page 5

FARM FINANCES

TE AWAMUTU ACCOUNTANCY BRANCH. ANNUAL REPORT. Mr Wallace Hodgson, at the annual meeting of the Te Awamutu branch of the New Zealand Farmers’ Union on Wednesday night, submitted the annual report of the local Farmers’ Accountancy Group, which was summarised in the following terms:— The group was sponsored by the Farmers’ Union in June, 1939, and had 45 members in the first year, and the number had now reached 60. ADVANTAGES TO FARMERS. 1. —Accounts kept by qualified public accountant on the double entry system. Note the extract from this year’s income tax form: “ No deduction for depreciation of assets (other than buildings) can be allowed unless books of account are kept on a double entry system and a copy of the farm working account and balance-sheet, showing the depreciation written off, is furnished in support of the claim.” 2. —lt is not necessary for members to write up any books; they simply forward periodically all farm receipts, cheque butts, dairy statements, etc., to the accountant. 3. —Each member receives a balance sheet and farm working account each year, which enables comparisons to be made with the previous years; can also be used as a basis for financing which is approved by the banks. 4. —All possible deductions are obtained for taxation purposes—for example, car expences, keep of dogs, poultry etc., full wages claimed for employees, plus rations. 5. —Adequate allowances claimed by wa of cash, not usually recorded, and therefore often missed. 6. —Land tax returns included in service; also the wife’s return, etc. 7. —lf required, reminders are given quarterly regarding payments of Social and National Security levies. COST. Originally the fee was £3 5s per year for three years, but was increased to £4 4s because of extra work due to the introduction of income tax for all farmers. However, the service would cost much more individually; group membersnip means a cheaper service. SAVINGS IN TAXATION. (a.) .An average farmer owning the usual farm plant and implements and a car, but without a tractor or farm truck, actually saved £9 13s in income tax and Social and National Security last year. (b.) Examples of much-increased savings bv farmers with a tractor, or a tractor and a truck, in 'addition to the usual implements and a car: A saved £3l 19s 6d, B saved £27 16s, C saved £24 9s. (c.) Average savino- in taxation over the whole group was £ll ss. The above examples do not include savings due to depreciation on buildings, which has been claimed in all cases, double entry not being essential in this case.

Savings in taxation will be even higher this year, due to increases in depreciation, allowances on motor vehicles, and to increase in Social and National Security from Is 9d to 2s.