Tax liability on SFP
In the article 'Understanding Taxes Relevant to your SFP' in the Farming section of the edition dated Tuesday, 14 June, it was stated that no deductions from the single farm payments (SFP) are available for tax purposes. This is incorrect. If the payment represents trading income, expenses of the trade are available as a deduction against this income.
For example, if a farmer has sales of €10k, SFP of €10k and trading expenses of €20k, his taxable income will be as follows:
Taxable income €0
In the above example, an allowable loss of €10k would have arisen if the payment had not been received.