Farm Ireland

Saturday 22 October 2016

Farmers get income tax reliefs and low-cost loans in Budget

Margaret Donnelly

Published 11/10/2016 | 14:11

Farmers facing an exceptionally poor year can “step out” of income averaging
Farmers facing an exceptionally poor year can “step out” of income averaging

A number of measures, including the option to 'step-out' of income averaging and access to EU backed loan funds were announced for farmers in the Budget

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The tough times farmers have been experiencing in recent months were to the fore of the Minister for Finance's budget speech.

Farming and the agri sector has been going through a tough time recently, Michael Noonan said, and Brexit and the subsequent weakness of sterling has impacted on the sector and poses a competitive challenge for farmers and the agri-food sector.

The initial detail from Minister Noonan included a number of measures that were well flagged in advance of the Budget.

He announced that farmers facing an exceptionally poor year can “step out” of income averaging and, instead, pay only the tax due on a current year basis with any deferred tax liability becoming payable over subsequent years.

“This facility will be available immediately and should provide cash-flow assistance this year,” he said.

He also announced that the flat-rate addition for farmers not registered for VAT is being increased from 5.2pc to 5.4pc with effect from 1 January 2017.

“The scheme, which is reviewed annually in accordance with the EU VAT Directive, compensates unregistered farmers for VAT incurred on their farming inputs.”

Noonan also said that building on Budget 2013, where he introduced farm restructuring relief to run to the end of 2015, he is extending it to the end of 2019. The terms of the relief are unchanged.

The Minister for Agriculture, Food and the Marine Michael Creed will detail further supports, including utilising EU exceptional adjustment aid to develop, in conjunction with the Strategic Banking Corporation of Ireland, a loan fund that will be low cost, below 3cp per annum.

Noonan also announced that payments under the new raised bog restoration incentive scheme to relevant owners and rights holders will be exempt from Capital Gains Tax.

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