ICSA president Patrick Kent described the taxation measures as positive for farmers but said that there was still a need to consider measures to ensure that taxation was not unfair due to extremes of income volatility in farming.
“We are pleased to see the reduction in the USC and the introduction of an earned income tax credit of €550 which is the first step in ending a very unfair treatment of self-employed people who do not have a PAYE tax credit. ICSA has lobbied for several years to get the same tax credit treatment for farmers and self-employed as apply to employees. We are also pleased to see a reduction in the Universal Social Charge and a commitment to phasing it out altogether. The USC was very severe on farmers as it did not take account of the normal capital allowances available under income tax and it also militated against making private pension provision.”
The ICSA president also commended the decision to increase the Capital Acquisitions Tax (Category A) threshold from €225,000 to €280,000 and expressed the view that further increases in the threshold should be considered in line with increasing asset values. “At the current rate, certain farm families were getting hit with a very onerous tax on transfer of the farm from one generation to the next, notwithstanding the availability of agricultural relief. This was particularly linked to successive reductions in the threshold during the austerity budgets and a move in the opposite direction is very welcome.”
The ICSA president said that the €1.3 billion announced for the Department of Agriculture had to be set against the reality that there is a lot of dissatisfaction with schemes such as GLAS and BDGP. “In particular, the decision to halve the maximum area for low input, permanent pasture in GLAS is a far greater issue than the amount of money potentially available, because it has a big impact on net benefit to scheme participants. While spending on the Rural Development programme is set to increase by 12.5%, the reality is that funding under the various schemes is still a long way from what is required. ICSA believes that we need a gradual reversal of the Disadvantaged Area cuts and more commitment to low income cattle and sheep farmers.”
ICSA is also looking for funds for a hen harrier scheme to adequately compensate for every hectare affected by designation. “We believe that there is scope for a scheme outside of GLAS and that this must be a priority to help such farmers who have been severely impacted by designation”, he concluded.