Five financial tips for 2026 from Deeside Monitor Farm management group meetings

With the end of the tax year approaching and a change in the Government’s stance on Inheritance Tax, it is the ideal time to take a fresh look at farm business matters.

Over the last year, the Deeside Monitor Farm management group has been focussing on financial matters. A series of meetings under the banner ‘Driving your Business’, has been co-ordinated by specialist agricultural accountant Elaine McKilligan, director and founder of McKilligan Financial and Monitor Farm Scotland Regional Adviser Peter Beattie.

Peter says: “The meetings covered a lot, from a variety of specialists, including a banker discussing what they wanted to see from client businesses and an independent financial adviser on pensions and other personal finance issues. Elaine ran several sessions tackling in-depth business help and advice, including understanding business accounts and how to set up Xero and use its features to track performance.”

With only a couple of months to the end of the current tax year, Elaine has some key pointers for all farm businesses:

1. Set up your farm business’ trusted team and communicate with them

Elaine says: “Every farm business should have a trusted team – your accountant, banker, solicitor and independent financial advisor. Talk to them and work with them.

“Communication is important, especially if you have a transaction planned such as investing in a property or succession planning. It depends on the circumstances, but it is always better to check whether something needs running past your other advisers. If you have a trusted team round you, you are off to a good start.”

2. Ensure youraccounts packageis set up for your business so you can get the most out of it – and keep it up to date

“If you’re using something like Xero just for your VAT return, you’re not getting the most out of it. Tailoring it to your business, using it properly and keeping it up to date will allow you to drill into costs and compare performance with previous years.”

She adds that setting it up for billing, for instance, means it’s easy to email invoices and your bank details. “There are so many efficiency savings, and you can do a lot more without much more effort. A lot of folk are scared to do more than the bare minimum, but your accountant should be able to help you make the most of it.”

3. Understand your accounts

Elaine says: “You need to understand your figures – what are your accounts telling you, and how is that impacting your tax position?

“I do come across clients who rarely had a meeting with their previous accountants, but we go through the accounts with every client to ensure they’re happy with them and understand them, and that we’re happy they’re correct – sometimes there are things which come out of the woodwork. It’s important everyone understands the figures.”

4. Think about your tax year-end position now

“We’re fast approaching the 31 March/5 April year-end, and we’re already having lots of conversations about projected profits and what might be done to manipulate that position,” says Elaine. “You can’t change any of that after the year-end, but you can change it in the year.

“Be mindful of your cash position – buying a new tractor on HP may save tax in the short-term, but you will still have those longer-term finance payments to make further down the line when you might have a bigger tax bill. It’s worth having a more proactive discussion with your accountant about the right thing to do.” 

 5. Take independent financial advice

Elaine says: “Make sure life insurance, for instance, is set up. Get everything covered from the financial perspective to protect and look after your family in future. Many people don’t think they need life insurance, but what if something happens to you – or another family member who has a crucial role? Think about it for everyone.

“If you’re thinking about succession, having a diversified portfolio which includes, say a holiday let business or cash, gives more options in future when it comes to dividing up the estate and can take the emphasis away from just the farm.

“Think about your long-term future too. Putting everything into the farm may be fine now, but will it look after you in your retirement? What about your pension provision?”

Elaine adds: “Having open, honest and respectful communication with your family, business partners and trusted team is crucial, as is knowing your figures, your accounts and thinking about tax planning. The other thing I would add is that it’s important to get Wills in place – something is better than nothing, and you can always update it as your circumstances change.”