Agricultural firm slapped with £100,000 tax bill (From Western Telegraph)

Agricultural firm slapped with £100,000 tax bill

A West Wales-based agricultural supply co-operative has been landed with a £100,000 bill from the Inland Revenue because it had no accounting system in place to prove that staff paid for their own fuel for private use of company cars.

Clynderwen and Cardiganshire Farmers Ltd was caught out when an Inland Revenue inspection revealed that it had not kept records of company and private mileage.

The error dated back six years when changes were made to the tax system for company cars.

The co-operative should have recorded private mileage as a 'benefit in kind'. It didn't and it had no alternative but to pay up.

General manager Keith Gosney, admitted the previous recording system had been out-dated.

"It was a system that had not changed for 30 years and because of that we were found wanting,'' he said. "We had not had an inspection since the new rules came in, so it wasn't picked up on. We now have a very robust system in place.''

Sadly for the co-operative, the tax error has negated the benefits of an excellent trading year when it achieved its highest ever turnover of £32.8 million. This resulted in a net profit before distribution of £67,700.

A move into own-brand grass seed and blended feeds was a key to the upbeat trading results.

Mr Gosney said the co-operative would now have to prepare to respond to the changing requirements of customers and shareholders following the Mid Term Review.

But one simple fact remained constant, he said. "We are a unique business, here to respond to our shareholder/customer wishes, working on a low profit basis,'' he said.

"We can respond to shareholder/customer demands and significantly reduce farm input costs, but only if we have a dialogue with our owners and we have the opportunity to do so.''