Budget 2017: Pressured Farmers Get Chance To Opt Out Of Tax Averaging
Farmers have given a broad welcome to measures introduced in Budget 2017, including a new low credit fund and the opportunity for those under most financial pressure to opt out of income tax averaging.
In his Budget speech, Minister for Finance Michael Noonan said the farming sector had been going through a tough time, affected by factors such as the weather and uncertainty over Brexit.
To assist those under financial pressure he said those facing “an exceptionally poor year” would immediately be able to step out of income tax averaging, meaning they pay only the tax owed on the current year, with any deferred tax to be covered in future years. He also said the flat-rate addition for farmers not registered for Vat was being increased from 5.2% to 5.4% from the start of January, while farm restructuring relief, first introduced in Budget 2014, is being extended again to the end of 2019.
In terms of farming supports, Minister for Agriculture, Food and the Marine, Michael Creed, announced a €150 million Agri Cash Flow Support Loan Fund, at a 2.95% interest rate, with the Strategic Banking Corporation of Ireland.
The loan fund, for amounts up to €150,000 over terms of up to six years, is partly made up of EU funds and is available to livestock, tillage and horticulture farmers.
Minister Creed said they formed part of “a three pillar strategy” to ease income volatility in the sector and reduce the cost of short-term borrowings.
The minister said: “While I hope that the loans will be available early in the New Year, I would encourage farmers to consider their cash flow and borrowings situation now, and if appropriate, to be prepared to apply for these loans when they become available on a first-come, first-served basis.”
Joe Healy, president of the Irish Farmers Association (IFA), welcomed the initiative, saying that access to low-cost credit was essential for many farmers. He said there were some gaps in what was delivered, such as no reversing of the areas of natural constraint cuts dating back to 2008, while there was “no mention” of the Fair Deal scheme.
Irish Creamery Milk Suppliers Association president John Comer said the diary aspect of the new fund should have been applied in a flat payment per dairy farmer, whereas there was a “very real danger” that in this format it could be “frittered away”.
Another move likely to benefit farm families was the increasing by €30,000 of the Category A threshold that applies to inheritances/gifts from parents to their children to €310,000.
Other Budget measures included a new Animal Welfare Scheme for sheep worth €25 million, improvements in the Farm Assist scheme for low income farmers, and increasing funding to the Green Low-Carbon Agri Environmental Scheme (GLAS) by €69m.
(Source – Irish Examiner – Noel Baker – 12/10/2016)
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