The 2019/2020 season has turned out to be one of two halves. Up to Christmas it was looking like one of the best seasons ever; lamb schedules, beef schedules, milk production, store markets and growing conditions all looked fantastic.

The lack of rain over February and March, stock water problems, crash in beef prices, and severe tightening in works space have all contributed to a quite different outlook.

Generally, 2020 incomes will be better than 2019, and many farmers are cashflow positive at present even if they are facing increased feed bills. Some may have had to sell capital stock.

The key message right now is keep talking to your wider team. If ever there was a year for good financial planning and updating budgets this is it. If you have any concerns around these areas do get in touch with your accountant and bank manager sooner rather than later.

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Some common issues that farmers may be thinking about include:

■ Keep updating that budget!

If a lot of your stock sales fall after Christmas, income may be well down on what you were estimating at the start of the season, or back in November.

Update your predicted cash balance and talk to your banker if overdraft limits are likely to be exceeded. Wherever possible, make decisions based on profit, not cashflow.

Much uncertainty exists in markets, but a good guess is better than no guess at all. Get that updated budget into your banker as soon as you can.

■ Terminal Tax due April 7 for everyone.

Many will have significant Terminal Tax amounts due on April 7. Get your accountant to talk to IRD if you are struggling to pay this tax. It is possible to make an instalment arrangement.

There are tax financing options available outside of your normal banking overdrafts.

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■ Drought Declaration Tax Relief

Income Equalisation Late Deposits available up to April 30, 2020 for the 2019 year, even if the 2019 tax return has been filed (only useful if 2020 well down on 2019).

Early withdrawals of Income Equalisation may be available. Extra assistance is available if your income has dropped significantly.

If staff have been laid off, they may be eligible for Rural Assistance Payments. Talk to your local Rural Support Trust on 0800 787 254.

■ Covid-19 Economic Response Package

The $12.1 billion package announced on Tuesday, March 17 includes $2.8 billion of business tax relief. Some of this may help farmers' cashflows in the next tax year.

The provisions below apply to all businesses, you do not have to be directly affected.
Low value assets (current limit $500 each excluding GST) will be able to be deducted as an expense up to $5000 in the 2021 tax year (starting June 1 or July 1, 2020 for most farmers). This will drop back to $1000 for the 2022 and subsequent tax years.

If you are thinking of investing in new or improved farm assets under $5000 it might be wise to hold off to the new financial year to get a full deduction.

The threshold of who must pay provisional tax is doubling to $5000 of tax. Your accountant will factor this into tax planning for 2020, and provisional tax payments for the 2021 tax year.