Budget 2017 must deliver on short term measures that will directly support farm incomes and longer term measures to tackle income volatility.
Expenditure priorities for farm schemes in Budget 2017
- Funding of €250m for agri-environment schemes in Budget 2017, with full payments for all GLAS, AEOS and organic scheme participants.
- Introduction of a targeted sheep scheme of €25m, with minimal costs and bureaucracy on farmers, to maximise its benefits.
- Increased funding for the ANC scheme, commencing the process of reversing the cuts to ANC payments in past budgets. Government’s commitment to increase funding to the ANCs by €25m in 2018 must be brought forward by a year. In advance of the full review of the ANCs, which will take place during 2017, IFA is looking for a one year increase in the maximum number of hectares on which ANC payments can be made.
- Immediate reopening of the Beef Data and Genomic Programme to allow new participants, with additional funding of €25m to increase support for the suckler cow.
- A funding allocation of €50m to the TAMS II programme to meet the demand across all farming sectors for on-farm investment
- The Government has committed to a review of Farm Assist and IFA is clear that the income and child disregards that were abolished in recent budgets must be reinstated. In addition, the number of places on the Rural Social Scheme must be increased from 2,600 to 4,000.
Taxation priorities for Budget 2017
- To maximise the number of farmers using income averaging, the current restrictions on eligibility where the farmer’s spouse is in self-employment must be removed.
- Income averaging to be amended to provide extra flexibility in a year when income falls significantly – see below.
- Earned Income Tax Credit to be increased to the same level as the PAYE credit in 2017.
- Extension of CGT Farm Restructuring Relief beyond end 2016.
- Taxation incentives for investment in energy efficient equipment and diversification into renewable energy.
Income averaging proposal
IFA is proposing that a farmer on income averaging is permitted, in a year when farm income falls significantly, to pay the tax due for a single year only on the actual income earned in that year, rather than the average tax due arising from five years’ income. The deferred tax in that year would be carried forward and paid over a three year period. It is proposed that, over a five year period, the farmer would have the option of using his actual income as the basis for his tax payment on two occasions.