WHAT does it cost?
Members purchase 1 share valued at £1 for each tonne of storage in Angus Cereals
There is a qualification loan of £55 per tonne to be invoiced on joining and paid within 28 days, although different capital options are now available where required.
The balance of the construction cost is financed by way of an annual service charge proposed over an approximate 7 year period depending on interest rates. This is borrowed by Angus Cereals Limited from their banking partner, Lloyds Corporate Markets. Repayment of this bank loan inclusive of interest will be set at £12 per tonne per annum until cleared. This we term a “service charge” and is a revenue expense and hence allowable against tax.
At the end of year 7 the bank loan is cleared. In year 8 we begin the process of repaying the Members initial Qualification Loan of £55 pt. A service charge of £12 pt is still charged to set against the original loan. Thereby over an approx 4.5 year period we convert the initial loan (capital) to zero by raising service charges (revenue). The purchase of storage rights is therefore a 100% allowable revenue expense.
Annual Operating Costs
As the store is owned by the members these are at cost and charges are agreed annually by the Board. No additional charges are required for cleaning/grading. Drying charges will be in addition but at cost.