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North of London | That is my feeling too.
There is a time when you are building the business when keeping the cash in the business is probably best.
As you become better established there is a balance.
Paying some tax all the time is much better than pushing it all forward and, as you note, having all income and no expenses.
In my career I know of 2 people a little older than me who would never pay tax, just would not let the government get their $$$$
Both died suddenly at relatively young age of 60ish.
Both of their widows had to continue to farm with hired help for several years to back the money out slowly rather than take the hit on big bucks in one year.
1 of those used to go to local elevator and buy a quantity of grain from them in late December to have expense and then sell it back in January.
His operating loan spiked high for a couple weeks at end of year.
Other one got into cattle after a really good year.
After about 4 years he had solved his tax problem and got out of the cattle business.
Paying some tax would have been much easier and probably left more $$ in his pocket.
There is an argument for accrual book keeping then decisions might be made on a business basis instead of tax reasons.
There have been people who got into financial distress because of payments in later years for machinery purchases that did not make $en$e but gave them a tax depreciation this year and payments going forward.
Yes pay-as-you-play is best in the long term picture.
Even helps when you finally get to CPP payout time. | |
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Farm economy
