July 2018

07 UTILITIES

utilities@woldmarsh.com

ENERGY LEVY INCREASES Electricity and mains gas procurement used to be about timing the wholesale market correctly. This is no longer the case, primarily within the electricity sector, where the actual cost of the electricity makes up half of your bill, and a considerable percentage being made up of government levies, transmission and distribution costs. The proposed government levy increases were introduced on the 1st April.

New Levy Rates effective 1st April 2018 (p/kWh) 0.532 forecasted

Rates pre 1st April 2018 (p/kWh) 0.547

Government Levy Feed In Tariff (FIT) Indicative Rate To support small-scale renewable generation within the UK Renewable Obligation (RO) To support large scale renewable electricity generation within the UK Contracts for Difference Supports, incentivise and pays low carbon generators to develop new projects Capacity Mechanism Operational (CM)* Set up to ensure there is enough reliable energy available to meet the country’s demands Electricity - Climate Change Levy (CCL)** Introduced to help meet targets for cutting emissions by encouraging business to use renewable energy and to become more energy efficient. Mains Gas - Climate Change Levy (CCL)** Introduced to help meet targets for cutting emissions by encouraging business to use renewable energy and to become more energy efficient.

2.210

1.882

0.428

0.0320

0.003

0.003

0.583

0.568

ELECTRICITY METER READS To ensure you are receiving accurate billing, may we remind you that all meter reads need to be submitted on a regular basis.

0.203

0.198 *Capacity Mechanism is only charged against Half Hourly metering. **CCL is not chargeable against domestic use, charities in relation to their non-business activities and business who use a very small amount of electricity (less that 33kWh a day).

user friendly, as well as working closely with HMRC and being part of the beta testing group for digital VAT. MOVING FROM A MANUAL CASHBOOK TO SOFTWARE? Farmplan understand that for some, moving to software from a manual system may feel daunting so they are making this step as straightforward as possible with a range of accounts software solutions designed with the customer in mind. The entry level product, Cash Focus, is easy-to-use and will manage VAT returns plus day-to-day cashflow simply. Farmplan products are competitively priced; for just £198 + VAT per year (which equates to just £16.50 + VAT per month) businesses can make the move and be ready for these important changes straightaway. A free MTD hub can be found at farmplan.co.uk/ making-tax-digital-hub/ which is regularly updated. To find out more about Farmplan software and for help to prepare your business for digital VAT and MTD, call Woldmarsh on 01507 602396 or email utilities@woldmarsh.com has since April 2018 been increased to a fixed 7% of the fuel make-up) is the main reason for fuel waxing out more easily as it attracts water and holds in suspension within the fuel, unlike water in fuel which historically would sink to the bottom of the tank and be able to be drained off. We want to gauge member interest in this new product, as at the moment it is produced in Qatar and shipped to Europe. At present it is shipped into the North West of England and used in Scotland. Our supplier Certas have close ties with Shell and are the only supplier of GTL in the UK. For them to make the investment in storage tanks at Immingham to supply the Woldmarsh region we need to ascertain the interest. The price is obviously of interest and sporadic indicative prices have been quoted at up to 2ppl over standard Gas Oil.

book keeping functions must be carried out using MTD compatible software. Manual records will no longer be acceptable and while spreadsheets may be used for day to day functions, they must link to compatible software to do the VAT submission. It will no longer be possible to go directly the HMRC’s website. BE PREPARED FOR MTD Farmplan have already begun making changes to their accounts software solutions to enable customers to manage MTD easily when changes come into effect for digital VAT in April 2019. They are working with Anne Cianchi, an MTD Consultant. Anne is a Chartered Accountant and manages her own smallholding. She has spent the last two years working with Farmplan customers to support accounts and business management solutions. They are also partnering with key industry groups including ICB, IAgSA, NFU and the farming community to ensure their solutions meet the requirements of HMRC and are an increasing stock over demand. This is all pointing towards a decrease in fuel prices which have started to show at the beginning of June, but for how long and how far is anyone’s guess. THE ANSWER TO THE WINTER FUEL PROBLEM? Shell have produced a diesel, widely used in mainland Europe that doesn’t have a cloud point until the temperature reaches -17ºC and a CFPP (cold filter plugging point) is -20ºC, it also has a cetane level of 70. British standard gas oil has a CFPP of -12ºC and a Cetane of 48. This new product is called GTL (Gas to liquid). One of the biggest advantages is that there is absolutely no Biofuel element in it. It is thought that the biofuel element (which

MAKING TAX DIGITAL: WHAT YOU NEED TO KNOW FROM FARMPLAN WHAT IS MAKING TAX DIGITAL? MTD is a Government initiative to digitalise the UK tax system. It will take place in phases starting with the electronic submission of VAT through compatible Businesses will have to keep digital records and submit VAT returns digitally from the first VAT return period starting after 1st April 2019. From April 2020 (at the earliest) quarterly submissions of income and expenditure will have to be submitted using MTD All businesses and landlords with turnovers in excess of the VAT threshold (currently £85,000) will be required to maintain their records digitally and make electronic VAT submissions to HMRC. This means that all FUEL Fuel prices have been creeping up at quite a rate for the last seven months. Various geopolitical reasons have been the cause of the rise or reasons given by the oil traders. In the background the large oil producers including the US frackers have been increasing their crude pumping capacity by also increasing well numbers and as of the end of May it was reported that the US production was greater than the capacity of the pipelines to deliver it to their storage facilities. Russia and OPEC are also proposing that they will increase production of crude by some one million barrels per day. With the increased production across the world allowing for the outage of Venezuela and the threat of US sanctions on Iran, there is still reported to be a large increase in production which will add to accounts software next year. WHEN WILL IT TAKE EFFECT? compatible software. WHO WILL IT AFFECT?

Carl Ullyatt / Debbie Carlin / Francesca Billings / Jenny Watterson