Bookkeeping for a farm in Langley comes down to four habits: plan cash around the harvest, keep the paperwork that proves your PST exemptions, code every sale by how GST treats it, and close each year with records your CPA and AgriStability can use without asking twice. Get those right and most of the year-end stress disappears.
The Township of Langley has about 75% of its land in the Agricultural Land Reserve, and the farms on it range from blueberry fields and nurseries to poultry barns and hay ground. The products differ. The bookkeeping problems are much the same.
How should a Langley farm plan cash flow around the harvest?
Build a 12-month cash forecast that starts from your sales calendar, not from your expenses. Income arrives in a few months; bills arrive in all 12. The forecast should show the lowest point in the bank account, usually late winter or early spring, and how you plan to get through it.
Say a berry farm takes in most of its sales between June and September, buys fertilizer and plants in March, and carries property tax, insurance, and loan payments all year. July's profit and loss looks fine; April's bank balance tells the real story. A simple forecast with three lines (cash in, cash out, and closing balance by month) is enough to decide whether you need a seasonal line of credit and how large it should be.
Split the books by enterprise where it helps you decide something. A farm that grows berries and runs a small nursery should see each one's margin separately, using classes in QuickBooks Online or tracking categories in Xero. Your lender will often ask for the same split at renewal.
Seasonal payroll belongs in the forecast too. Under BC Employment Standards, farm workers must be paid at least twice a month, and they do not receive overtime or statutory holiday pay. For hand harvesters on piece rates, 4% vacation pay is already included in the rate for every crop except daffodils. Employers must post the piece rate for each crop and give each worker a picking card, and those cards are the backup for every pay run. Our payroll service keeps them with the payroll records.
Which farm purchases are exempt from BC PST, and how do you claim it?
Qualifying farmers can buy or lease the farm equipment and goods specifically listed in Bulletin PST 101 without PST, as long as each item is used solely for a farm purpose. You claim the exemption by giving the supplier a completed Certificate of Exemption (FIN 458) or an unexpired BC Farmer Identity Card at or before the time of sale.
You are a qualifying farmer if you own or lease land classified as a farm under the BC Assessment Act. There are other routes for some operations, such as beekeepers and egg, poultry, or hog farmers using less than 0.8 hectares who earned at least $2,500 from those activities the year before. The BC Farmer Identity Card is issued through the BC Agriculture Council.
Appendix 1 of the bulletin lists them: farm tractors, fencing and fence posts, livestock feeders and waterers, irrigation equipment, refrigeration used to cool or store farm products, greenhouse heating systems, and much more. Feed and hay are exempt when bought solely for a farm purpose.
Some things farmers buy all the time are not on the list:
- Farm trucks and pick-up trucks
- Generic tools common to many trades, such as wheelbarrows, drills, and hoses
- Building materials for barns
- Computers, office furniture, and telecommunication services
If a supplier does not charge PST on a taxable item, you self-assess it. Without a PST number, that means filing a Casual Remittance Return (FIN 405) by the last day of the following month.
If you forget the card at the counter, the supplier may refund or credit the PST if you bring the paperwork within 180 days. After that, you can apply to the province using form FIN 355/FAF within four years of paying the tax. New qualifying farmers can also claim a refund on listed items bought in the two years before they qualified.
Two other rules catch people out. First, if an exempt item later goes to personal or non-farm use, PST is due from that date, calculated on the greater of its depreciated value or 50% of the original price. Second, heat, natural gas, and fuel oil for farm use are not subject to PST, but if the same supply also heats the house or a retail stand, you need separate meters or tanks to keep the farm portion exempt.
In the books, give exempt purchases their own tax code and attach the certificate or card details to the bill. When the province asks why no PST was paid on a $60,000 tractor, the answer should take one click.
How should farm equipment be recorded in the books?
Every piece of equipment over a set dollar amount goes into a fixed asset register, not into repairs. The register lists the date, supplier, cost, PST paid or exemption claimed, serial number, and what the item is used for. Your CPA uses it to calculate capital cost allowance; we keep it current so they are not rebuilding it from bank statements.
Financing needs the same care. A tractor bought on a dealer loan should show the full cost as an asset and the loan as a liability, with each payment split between principal and interest. A trade-in should be recorded as a disposal of the old machine, not netted quietly against the new one. If a truck is used partly for the household, keep a mileage log; it is the only record that supports the business share.
How does GST work on farm sales?
Most farm products sold as food are zero-rated for GST. That covers fruit and vegetables, livestock raised for food, hay and silage sold in bulk, and many other items listed in chapter 12 of the CRA's T4002 guide. A zero-rated sale carries GST at 0%, but a registered farm can still claim input tax credits on the GST it pays, so many farms file returns that end in a refund.
Not every farm sale is zero-rated. The CRA lists livestock not normally raised as food, such as horses, as taxable for GST. PST has its own list: Bulletin PST 101 names fresh cut flowers and ornamental hanging baskets among the taxable goods a farm might sell, so a farm stand can end up with three kinds of sale on one till.
The fix is in the chart of accounts. Use one income account for zero-rated farm sales and another for taxable sales, and set the tax code on each POS item once. If your taxable sales stay at or under $30,000 over four consecutive calendar quarters, you are a small supplier and do not have to register, though many farms register voluntarily to recover GST on inputs. We cover the details in GST and PST for Langley businesses, and our GST and PST filing service prepares the returns.
What records does the CRA expect a farm to keep?
Keep every record that supports your income, expenses, and tax returns for six years from the end of the last tax year it relates to. For a farm, that means:
- Sales slips, packer and marketing board statements, and farm stand till reports
- Supplier invoices and receipts, including PST exemption certificates
- Bank, credit card, and loan statements
- Payroll records, picking cards, and contracts with farm labour contractors
- Inventory counts at year-end: crops on hand, livestock, feed, and supplies
- Purchase and sale documents for equipment, land, and quota
The year-end inventory count matters more on a farm than almost anywhere else. It feeds the inventory adjustments on your tax return and the production and inventory figures AgriStability asks for. A farming business can also elect to report income on the cash method instead of accrual. Which method to use is a decision for your CPA; the monthly books can support either.
What do AgriStability deadlines mean for your bookkeeping?
AgriStability pays out when a farm's margin drops more than 30% below its reference margin, covering 80 cents for each additional dollar lost. In British Columbia the program is run by the province, and staying in it means two things every year: paying the enrolment fee for the program year, and filing Statement A with your farm income, expenses, and production for the year after.
The current rules on gov.bc.ca are:
| Step | Regular deadline | Late deadline, with penalty |
|---|---|---|
| New participant signup | April 30 of the program year | None listed |
| Enrolment fee payment | April 30 of the program year | December 31 |
| Statement A | June 30 of the following year | September 30 |
| Advance (interim) payment request | March 31 of the following year | None listed |
To be eligible, a BC farm must earn income from primary agricultural production, have at least six consecutive months of farming activity, have completed a production cycle, and file farm income with the CRA. For a new participant, the first fee is due April 30 or 30 days after the date on the enrolment notice, whichever is later.
For 2026 only, the province opened late participation in response to drought. Farms not already enrolled can apply for the 2026 program year until November 30, 2026. There is a $300 late participation fee, and a 20% deduction applies to any benefit paid. Dates like these change from year to year, so check the BC AgriStability page before you rely on one.
For individuals, Statement A is filed with the CRA alongside the farm's income tax return, and the CRA passes it on. Corporations can file it directly with BC AgriStability. Either way, the statement is only as good as the books behind it: clean income and expense accounts, and an honest inventory count at year-end.
When do restricted farm loss rules apply?
The restricted farm loss rules apply when a farm is run as a business but farming is not your main source of income, either alone or combined with a smaller side source. In that case, the loss you can deduct from other income in a year is capped. For tax years ending after March 20, 2013, the most you can deduct is $17,500.
The calculation is the full first $2,500 of the loss plus half of the next $30,000. A net farm loss of $32,500 or more therefore gives the maximum $17,500 deduction. Whatever is left becomes a restricted farm loss, which can be carried back three years or forward 20 years, but only against farming income.
If farming is your main source of income, the whole loss is deductible against other income. If the farm is not run as a business at all, none of it is. The CRA weighs factors such as gross and net income, capital invested, cash flow, your personal involvement, the farm's ability to make a profit, and the plans you made and carried out. This is a tax judgement, and it belongs with your CPA. Our part is books that show the farm as it actually runs.
Where should a Langley farm start with its books?
If your farm books are a shoebox and a bank feed, start with three things: a separate bank account for the farm, a tax code for PST-exempt purchases, and a cash forecast to next spring. Our monthly bookkeeping service handles the rest, and year-end preparation gets the inventory count and asset register to your CPA in one tidy file. See how we work with Langley farms and agriculture, or read the wider Langley owner-operator's guide to bookkeeping.
Questions owners ask
Is my farm pickup exempt from PST if I only use it on the farm?
No. Bulletin PST 101 lists farm trucks and pick-up trucks among taxable items, even for qualifying farmers. The exemption covers the specifically listed equipment in the bulletin, such as farm tractors, and only when it is used solely for a farm purpose.
I forgot to give the dealer my farmer card. Can I still get the PST back?
Usually, yes. If you give the supplier your FIN 458 or BC Farmer Identity Card within 180 days of being charged, they may refund or credit the PST. Otherwise you can apply to the province on form FIN 355/FAF within four years of paying it.
Do I charge GST on berries and vegetables I sell from the farm?
Most farm products sold as food, such as fruit and vegetables, are zero-rated, so the GST rate is 0%. If you are registered, you still file returns and can claim GST paid on your inputs, which often means a refund.
What happens if I miss the AgriStability fee deadline?
The regular fee deadline is April 30 of the program year. BC accepts late payment until December 31 with a penalty. After that, coverage for the year depends on any special late participation offered, so check the BC AgriStability page.
How much of a farm loss can I deduct against my off-farm job?
If farming is your main source of income, the full loss can be deducted. If it is a business but not your main source, the restricted farm loss rules cap the deduction at $17,500 a year. If it is not run as a business, none of it is deductible. Your CPA makes that call.
Should my farm use the cash method or accrual?
The Income Tax Act lets a farming business elect the cash method, while most other businesses use accrual. The choice affects inventory adjustments and how losses are calculated, so it is a decision for your CPA. Your monthly books can be kept either way.