Start thinking now about your January 2024 tax payment

With autumn cultivations well under way, and the Tax Return deadline still three months off, it won’t come as a surprise if farmers are not thinking about their tax payments right now. It may be worth a thought, however, as there could be the potential to reduce your payments on account (POA) for 2023/24 (payable in January and July 2024).

Depending on when crops were sold, and inputs purchased, it is likely that profits from the 2023 harvest are going to be lower than 2022. Yields have not varied significantly, but grain prices have dropped and input costs remain high, indicating that profits will be lower.

If you already have, or are expecting to have, accounts that show a good profit from the 2022 harvest, it would be worth considering what the next year’s position will look like. If you think that your accounts covering the 2023 harvest will show a lower profit then you should ask your accountant to consider reducing your POA for 2023/24.

POA for 2023/24 are automatically based on the 2022/23 tax liability, with the standard assumption that the tax for 2023/24 will be the same as the previous year. Anyone who thinks that their taxable income will be lower in the year ended 5 April 2024 can make a claim to reduce their POA, either on the Tax Return itself or by making a standalone claim if the Tax Return has already been submitted.

What to do if you are struggling to pay your tax bill

Taxpayers who think they will struggle to make their January tax payment are advised to contact HMRC and set up a payment plan to spread the cost. This option is available to taxpayers who:

• have filed their latest Tax Return
• owe £30,000 or less
• are within 60 days of the payment deadline
• do not have any other payment plans or debts with HMRC

Payment plans need to be set up by the taxpayer themselves and can be done either online through their digital tax account or by phoning the HMRC self-assessment payment helpline on 0300 200 3820.