12 Oct 2016
BUDGET 2017 – FARMERS CAN AVAIL OF TAX RELIEF FOR ENERGY EFFICIENT EQUIPMENTEnvironment & Rural Affairs, Farm Business & Credit
Budget support for use of energy efficient equipment by farmers will save money and protect the environment, writes Thomas Cooney, IFA Environment and Rural Affairs Chairman.
The decision to accept IFA’s Pre-Budget proposal to extend the existing scheme of accelerated capital allowances (ACA) for energy equipment to sole traders, including farmers, is a welcomed move that will encourage on-farm investment in energy saving technologies.
The scheme, which is administered by the Sustainable Energy Authority of Ireland (SEAI), allows farmers, sole traders, companies and non-corporates to write off 100% of the purchase value of qualifying energy efficient equipment against their profit in the year of the purchase. The full list of eligible equipment is listed on the SEAI website and includes motors and drives, lighting, building energy management systems and heating and electricity provisions.
The ACA scheme works by allowing farmers to deduct the full cost of eligible energy efficient technologies from the profits in the year they were purchased. Some of the advantages of the ACA include reduced tax bills, improved cash flow and a reduction in energy costs.
To avail of the scheme
To claim the ACA, you simply need to decide on the piece of equipment that you intend to use on the farm, ensure that the product is on the Triple E Products Register on the SEAI website during the relevant accounting period before you buy, and finally claim the ACA for the purchased equipment on your tax return form.
This measure, secured by IFA in the recent budget, will lead to at least €3m worth of savings to farmers if it is fully availed of. Every farmer should consider it.
For other cost savings ideas on the farm have a look at the IFA-led Smart Farming initiative. This is yet another example of farming addressing the dual challenges of improving farm returns while reducing our environmental impact.