It was a positive budget for farmers but we should reserve judgement until the Finance Bill is published, writes
AS I listened to Minister Donohoe’s budget speech last week, I remarked to myself that farmers were scarcely mentioned.
But on closer examination of the budget documentation on the Department of Finance website, I began to realise that farming had not in fact been forgotten as there are a number of worthwhile specific measures.
These, coupled with measures benefiting the general public, could amount to a real improvement in disposable incomes, particularly for a suckler farmer in a disadvantaged area.
In reality it is the totality of benefits that renders it a ‘not so bad’ budget for many farmers.
We can all be thankful that virtually all of the budget measures, minuscule as many of them might be, are positive and a welcome departure from the cut and slash budgets of recent times. That said, the ‘sneaky stuff ’ is generally concealed in the Finance Act so maybe it will not be all positive by the time the changes are enshrined in legislation.
MEASURES SPECIFIC TO FARMING
• New Beef Environment Efficiency Pilot Scheme This scheme is designed to improve the carbon efficiency of beef production and aims to provide up to €40 per suckler cow in return for various actions including the weighing of calves.
• Increase in Disadvantaged Area payment
A funding increase of €22.7m would indicate an overall increase in payment of 10pc. It remains to be seen if this will result in an across-the-board increase of 10pc. If so, the increase could be worth up to an additional €340 per year for those in receipt of the maximum payment.
• Increase in forestry funding A funding increase of €103.5m for improved grant and premium rates.
• Increased funding for TAMS grants
An increase of €70m in funding is allocated.
• Increased funding for Environment & Waste Management Programme
An increase of €70m in funding is allocated.
• Increased funding for Future Growth Loan scheme This scheme is available to SMEs, including farming, and has been funded to the tune of €300m. Loans under this scheme are provided unsecured.
• Farm Assist Increase
An increase of €5 per week plus an increase of €5.20 per week for each qualifying child under age 12 or €2.20 per week for each child under age 12. For a family of two parents and three children over age 12 this could be worth an additional €20.60 per week.
• Three-year extension to the Stamp Duty Exemption scheme
This exemption applies to young trained farmers under age 35 who are in a position to devote 50pc or more of their normal working hours to farming.
• Three-year extension to the stock relief schemes
This extension applied to the young trained farmer 100pc scheme, the 50pc partnership scheme and the 25pc general scheme.
• Relaxation of the Income Averaging rules
Up until now people with another self-employed trade such as agricultural contracting were not eligible to avail of Income Averaging but this restriction has now been abolished.
GENERAL MEASURES INCLUDING FARMERS
• Extension of low tax bracket
The low tax bracket has been extended from €34,550 to €35,300, which will represent a saving of €150 per annum for those earning more than €35,300.
• Reduction in USC
Any reduction is welcome but this reduction is minuscule. An individual with an income of €37,000 will save €14.38.
• Increased Earned Income Credit
This credit applies to all self-employed people and has been increased by €200.
• Increased Home Carer’s Credit
This credit applies to stay-athome parents caring for one or more dependent people and earning less than €7,200 per annum. The credit has been increased by €300. • Capital Acquisitions Tax threshold increase
Martin O’Sullivan is the author of the ACA Farmers Handbook.
He is a partner in O’Sullivan Malone and Company, accountants and registered auditors; www.som.ie
Martin O’Sullivan
Do