The opening value of an item of stock must equal its closing value in the previous year. The total value of all stock on hand at the start of the year is equal to the amount shown as closing stock on your 2017 tax return.
If you are a primary producer, you must add the value of your opening stock from your livestock account at PP4 on your primary production worksheet to the value of your opening stock from your produce account at PP9. The total of these amounts is the total value of your primary production opening stock.
Do not include any amounts representing opening stock of a business which commenced operations during the year. Include the purchase costs of these items at Purchases and other costs.
Purchases and other costs represent the direct cost of materials used for manufacture, sale or exchange in deriving the gross proceeds or earnings of the business. It includes inwards freight; and also the cost of stock acquired when starting or acquiring a business during the year. It may also include some costs for labour and services provided under contract, if these are recorded in the cost of sales account in your business books of account. If so, do not also include this amount at Contractor, subcontractor and commission expenses.
If you are a primary producer, you must include the value of your purchases from your livestock account at PP5 on your primary production worksheet.
Former STS taxpayers
If you are eligible and are continuing to use the STS accounting method, include only purchases and other costs that you have paid. See Former simplified tax system (STS) taxpayers.