IFA seek tax deferral mechanism to ease Brexit blow to farm income
Published 26/07/2016 | 14:58
A new tax deferral mechanism allowing struggling farmers to pay back tax over a three year period could help ease the farm income crisis, IFA president Joe Healy has said.
The tax incentive is one of a raft of short term measures the IFA are calling for in their pre-budget submission 2017.
As low product prices, a bad spring and the implications of the Brexit continue to add further volatility to farm incomes, the IFA are urging the Government to “inject funding” into the sector.
Speaking at today’s launch in Dublin Mr Healy said: “Farm families are under huge pressure as cash flow tightens and the viability of their farm is put at risk. The recent vote by the UK to leave the EU has created major uncertainty and immediate price challenges”.
“Budget 2017 provides an opportunity for the Government to take funding and taxations decision that will directly address the farm income difficulties being experienced and underpin the longer-term development of the sector,” he said.
The IFA are also pressing the Government to deliver on its funding commitment top the Rural Development Programme.
Expenditure priorities highlighted include: funding of the €250m for the agri-environment schemes in Budget 2017 - with full payments for all GLAS, AEOS and organic scheme participants - the introduction of a targeted sheep scheme of €25m, increased funding to the ANC scheme and the immediate reopening of the beef data and genomic programme.
In relation to income averaging, Mr Healy said “it’s crucial” that all sectors can avail of it.
The IFA are proposing that in a year when farm income fall significantly tax should be paid based on the actual income earned rather than the average tax due arising from five years’ income.
The deferral would be carried forward and paid over a three year period.
“Prices have fallen since Brexit, so in a volatile year like we are having, we believe you should pay tax on the estimated income for this year and then be able to defer tax on anything on top of that over the following three years,” said Mr Healy.
“It’s absolutely not a way of getting out of paying tax, it's just in the difficult year, allowing you to defer tax over the following few years but it would all be paid,” he said.
Martin Stapleton, IFA farm business chairman, said this mechanism should provide an “effective response and ease cash flow pressures” on farmers in a year where there is a major drop in incomes.