IFAC, the accounting, tax, and business advisory firm, is advising Cork suckler and beef farmers to start managing their tax cashflow now, ahead of autumn tax bills.
An Ifac review of 2024 figures to date, and projections for 2025, shows the majority of suckler and beef farmers across the country will not only have larger income tax bills than normal, but in some cases, significant tax bills.
Suckler and beef farmers are currently receiving higher prices than ever before for their livestock sales, both through the live trade and through beef prices received from processors.
Gearoid Condon, partner at Ifac’s Bandon office, said that many would say that these prices are a long time coming, ‘and well deserved for the time, effort, capital and breeding over many years that the suckler and beef farmer has put into their herds.’
‘However, they now need to be aware of what their farm profits are for 2024, what tax is payable on these profits, and perhaps more importantly, what the likely farm income is going to be for 2025.’
Some of the options to reduce income tax bills include claiming stock relief, where Revenue will give farmers an allowance of 25%, 50% or 100% of the increase in stock value.
The value of the relief depends on whether the farmer is a young, trained farmer and the type of structure of ownership.
With the average suckler cow now worth over €2,000 in cull value, a big increase on previous years, it is time to review stock values and take advantage of stock relief.
Another option is to look at paying family wages with any ‘bit left over’; this can reduce the tax bill, but to comply with PAYE rules, these family members must be on the payroll and wages paid into their bank account.
Any wages paid to children can be used to pay college fees and accommodation in the future, if required, thereby saving on the double.
When a weanling is sold from the child’s favourite cow, pay them a bonus, boosting their interest for the future.
Other savings can be made by making use of income averaging, making pension contributions to reduce tax liabilities, and investing in the safety of the farm using the profits; expenses incurred will reduce the tax bills. Contact Ifac directly for more information.
