Farm Ireland
Independent.ie

Saturday 10 December 2016

Government to approve 'rainy day' fund for farmers in the Budget

Published 28/09/2016 | 02:30

Currently, farmers’ income is taxed on an average basis over five years. But the new option will allow farmers, during years when profits are down, to pay tax over their actual income for that year. Stock Image
Currently, farmers’ income is taxed on an average basis over five years. But the new option will allow farmers, during years when profits are down, to pay tax over their actual income for that year. Stock Image

A special 'rainy day' fund for farmers will be announced in the Budget.

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Under the proposals, farmers will be able to set aside a portion of their income during profitable years that will be exempt from tax.

The scheme is designed to allow farmers to then use this money to supplement their income during more difficult years.

Finance Minister Michael Noonan also indicated plans to introduce a new tax payment option for farmers.

Currently, farmers' income is taxed on an average basis over five years. But the new option will allow farmers, during years when profits are down, to pay tax over their actual income for that year.

The Irish Farmers' Association (IFA) called for the introduction of such a mechanism in its pre-budget submission.

The two measures were discussed at Cabinet yesterday.

Farmers who use the schemes could potentially reduce their tax bill by thousands of euro.

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Social Protection Leo Varadkar Social Protection also signalled increases in the Farm Assist and Rural Social Schemes.

"This is all about giving some breathing space to an industry that is feeling very bruised indeed," said a government source.

At the Ploughing Championships in Tullamore last week, Agriculture Minister Michael Creed described farmers as being "bloodied", particularly in light of Brexit.

Extortionate

The details of the measures come after the Irish Independent revealed plans to overhaul the so-called 'Fair Deal' nursing home scheme in favour of farmers in 2017.

Under the proposals, at least half of the value of farm assets is to be excluded from HSE means tests - in a move that would cut the annual nursing home bill by thousands of euro.

The changes to the scheme, which are still being worked out, are in response to claims farmers are not availing of the voluntary scheme because of the cost involved.

Farming groups also say that farmers are transferring land much sooner than they would like in a bid to avoid extortionate nursing home costs.

Irish Independent