Farmers warned over tax implications of seasonal activities

Farmers, landowners and rural businesses are being warned to remember the tax implications of moving into other seasonal activities.

• Letting land for winter wonderland type seasonal attractions.

• Operating a Christmas market.

• Selling Christmas trees, holly, logs and other seasonal products.

• Charging a rent to another operator for the sale of Christmas trees.

• Running events in the house such as a carol concert or a Christmas fair.

Mike Harrison, Partner in the Landed Estates and Rural Business Group of UK top 20 Chartered Accountant Saffery Champness, says: "Whilst the income from such activities obviously needs to be declared it is important to ensure that it is included in the appropriate section of the tax return. Failure to do so could have adverse effects on the IHT status of the business and its assets, or reduce the opportunity to pay pension contributions.


"The VAT status of the activity should not be forgotten – those who are VAT registered, for example a farmer who sells Christmas trees, will need to account for VAT on the sales price. Similarly, letting land that has been ‘opted to tax' will mean that the operator will need to pay VAT in addition to the agreed fee for the use of the land concerned.

"Those who are not VAT registered need to remember to consider the income arising from these seasonal activities as well as their mainstream income and whether the VAT threshold is likely to be breached.

"Christmas events, if run in-house, may require additional temporary staff. Remember that staff taken onto the payroll, however temporary, and despite how they may be paid, will be subject to the normal PAYE regime including Real Time Information reporting."