Farmers want tax break to help save profits for rainy day
FARMERS want a special new tax break to help them save for a rainy day.
The Irish Farmers Association (IFA) has called for a tax deposit scheme that would help them save the profits from a strong farming year for re-investment within five years.
They argue in their pre-Budget submission that this step is crucial to cope with increasingly volatile weather and food prices.
While farmers are already able to average their income over three years for tax purposes, the IFA said this does not go far enough to cope with the ups and downs of farm income which have become more volatile due to changes in EU grants resulting in greater exposure to world food prices.
Allowing them to place a portion of their income in a ringfenced tax deposit account, with no income tax payable on it for up to five years, would ensure they could spend it in the most rational manner on their farm, said IFA president Eddie Downey.
"Volatility is a huge issue in farming, particularly when you look at grain or beef. Two years ago tillage farmers were getting €260-€280 a tonne, now it's €160-€170," he said.
Currently the only tax-efficient measure was to put it into a pension fund, he said, but that money was then lost to the farmer until retirement, so the proposed system would help with cash flow on farms in bad years.
The IFA is also urging that the deadline for making and paying income tax returns remain at their current date of October 31 rather than being brought forward to earlier in the year as has been suggested by the Department of Finance.
They said this is crucial as so much farm income arrives in the autumn – mainly through EU farm payments – that they wouldn't have the cashflow to meet an earlier deadline.
Other priorities for the IFA in Budget 2015 include getting an Earned Income Tax Credit for the self-employed similar to the PAYE tax credit.
They say it's unjust that a self-employed person – including farmers – earning €20,000 a year will pay 20pc of that in tax while a PAYE worker will only pay 10pc.
They also wish to ensure that the new agri-environmental GLAS scheme gets up and running in early 2015 with payments made to the 30,000 farmers who can avail of it.
They also want to ensure that €52m is provided for the Beef Data and Genomic Scheme aimed at improving breeding and welfare in the suckler beef herd.
The IFA also called for a much simpler taxation system for small farmers as currently it was much too complicated and costly.
Mr Downey said that there was a two-tier Ireland out there with a perceived lift in the economy of Dublin while rural Ireland was much slower to pick up.