Understanding what expenses are allowable
Postby Steveg1985 » Thu Dec 07, 2017 2:17 pm
I'm in the process of setting up my own business and I'm trying to work out possible profit margins but for the life of me I can't get my head around what expenses are deductible. In my opinion anything that costs me money to run my business should be deductible but I guess the world isn't the same as my opinion.
I plan to setup a farm but my farm will be nothing like conventional farms. Conventional farms go against nature and destroy landscapes by tilling soil, which kills fungi, spreading chemicals etc.
I plan to recreate topsoil and create a thriving food forest and and be extremely diversified.
For the first two years I expect my expenses to be nearly 100% of my profit from selling produce I grow as the land I have bought has practically no topsoil and still contains harmful chemicals.
I will have to spend money to make the land suitable for organics. Such as buying large amounts of seeds to plant specific crops that won't sell for the first 2 years. These crops will put nutrients in the soil. I will then have to buy tons of timber as I will build raised beds to grow my first crops in, with organic top soil I have got from elsewhere.
I need to buy tons of bentonite as I will be digging drainage ditches in a way that utilised water efficiently the water is stored and I will grow out fish for harvest.
Trees will be grown and sold eventually live stock will be allowed to free roam throughout the forest. I know this can provide a suitable income however I need to understand if all my expenses in the first two years are tax deductible. Everything I buy for the farm is basically fertiliser.
Even the timber joists I will buy for raised beds will eventually decompose due to rich amounts of fungi in the soil.
So my question is, if I spend a large amount of money in the first year on,
Seeds,
Mulch (straw, bark chips, manure)
Timber
Small trees to be grown and eventually sold
Bentonite (soil conditioner to stop water leakage)
Would all of these be allowed as tax deductible and if so what would I need to prove it? I plan to eventually get an accountant if anyone can recommend a good one in north east England. But for now I am in planning stage and want to make sure I have a viable plan before I start getting accountants involved
I read somewhere that expenses that are "wholly and exclusively for the business are tax deductible" but then I've read examples of several things that could be wholly and exclusively for the business not being allowed. I could really use help understanding this.
Thanks