Why no grants for farm machinery in this country

20silkcut

Often wondered why this was the case considering how essential machinery is to agriculture.
Also find it strange that you can't write the full amount off in one year when you purchase.
If you earned a lump sum in one particular the revenue would not let you spread it out over a few years. Why not if you spend it??

viztopia

I think the answer to both questions if that people woould go mental buying machinery if there were grants and allowed to write off in year one

blue5000

Anytime there is a grant prices automatically jump by the value of the grant. Look at sheds, slatted tanks or vac tanks for example.

tanko

Was there grants for Rotary mowers and Haybobs in the eighties?

Nekarsulm

There were schemes to encourage farmers join forces with a neighbour, to buy silage machinery etc. Back in late 70's. We bought a JF fc80 harvester with a neighbour .
There were various schemes in the late 80's with a grand payable on slurry equipment.

Dawggone

There is/were grants for farm machinery....milking parlor/bulk milk tanks...iirc that it also extended to slurry tankers?

kowtow

20silkcut wrote: »

If you earned a lump sum in one particular the revenue would not let you spread it out over a few years. Why not if you spend it??

apart from distorting the book value of the farm by removing depreciation it becomes too easy to exchange income taxes for capital taxes on a grand scale.

Redirect income to farming company> buy machines to cancel out income => sell shares of farming company (via intra EU merger if required) => take the cash out as either capital gain or income in a jurisdiction or at a rate which suits, or offset against a capital loss elsewhere...

J.O. Farmer

20silkcut wrote: »

Often wondered why this was the case considering how essential machinery is to agriculture.
Also find it strange that you can't write the full amount off in one year when you purchase.
If you earned a lump sum in one particular the revenue would not let you spread it out over a few years. Why not if you spend it??

If you get a lump sum you are making income.
If you spend it on machinery you are exchanging 1 asset (money) for another (machinery). The net effect on the balance sheet is zero. Depreciation is then allowed as an expense each year to allow for the decreasing value of the asset.
In certain circumstances such as redundancy the value of the lump sum is divided by a number of years to get the value taken as income in that year.

20silkcut

kowtow wrote: »

apart from distorting the book value of the farm by removing depreciation it becomes too easy to exchange income taxes for capital taxes on a grand scale.

Redirect income to farming company> buy machines to cancel out income => sell shares of farming company (via intra EU merger if required) => take the cash out as either capital gain or income in a jurisdiction or at a rate which suits, or offset against a capital loss elsewhere...

In the case of a farm could they not allow one capital cost per year to be written off in full. Every farm has one big spend on machinery every year on average. Are the revenue not great at applying averages to grey areas. 20% per year is not realistic anyway. I paid 6k for a tractor in 2007 which is still worth most of that. The revenue have no problem with distorted book values when the shoe is on the other foot. I got paid two SFPs in one year due to a hold up and boy did they fleece me.

freedominacup

20silkcut wrote: »

Often wondered why this was the case

Monkey, keys, banana plantation comes to mind. Thank God for spellcheck. I'd forgotten how to stop spelling banana.

kowtow

20silkcut wrote:

In the case of a farm could they not allow one capital cost per year to be written off in full. Every farm has one big spend on machinery every year on average. Are the revenue not great at applying averages to grey areas. 20% per year is not realistic anyway. I paid 6k for a tractor in 2007 which is still worth most of that. The revenue have no problem with distorted book values when the shoe is on the other foot. I got paid two SFPs in one year due to a hold up and boy did they fleece me.

True enough. On the whole I think I'd be in favour of less rules and less tax though.... once they start with special schemes the consequences usually need more.

I suppose also there might be a net drop for the tax man especially in a cyclical market.. if every boom year farmers could eliminate tax and aquire assets instead.

boggerman1

20silkcut wrote: »

Often wondered why this was the case considering how essential machinery is to agriculture.
Also find it strange that you can't write the full amount off in one year when you purchase.
If you earned a lump sum in one particular the revenue would not let you spread it out over a few years. Why not if you spend it??

Why should in a hypothetical world should farmers get grants to buy machines.this mindset has to be got rid of from modern farming.why should we be treated differently or like special cases.is this an extension of the entitlement culture today

Shannon757

They would all buy Fendts.

blue5000

Shannon757 wrote: »

They would all buy Fendts.

Black ones:rolleyes: with stainless steel exhausts.

Shannon757

blue5000 wrote: »

Black ones:rolleyes: with stainless steel exhausts.

Or the Deutz warrior

freedominacup

boggerman1 wrote: »

Why should in a hypothetical world should farmers get grants to buy machines.this mindset has to be got rid of from modern farming.why should we be treated differently or like special cases.is this an extension of the entitlement culture today

Not trying to make a case for it at all but I guarantee you no manufacturer or processing business in this country would put in a door without checking if there was Grant aid for doing it. Ida jobs cost the bones of 500k each ifirc to establish between all the various grants and subs.

ganmo

check out the organic tams

20silkcut

boggerman1 wrote: »

Why should in a hypothetical world should farmers get grants to buy machines.this mindset has to be got rid of from modern farming.why should we be treated differently or like special cases.is this an extension of the entitlement culture today

There are grants available in every industry that creates employment. I don't think there is any cultural issue in relation to farming.

Nobody has come up with a valid reason on this thread other than the farmers and their shiny new toys argument
In fairness when a farmer puts up a shiny new shed that can be seen for miles around he will get nice big hefty grant to help him along.
I know an old man in his late 70's still farming with a wheel barrow who never sat in a tractor in his life.
lots of farms have been held back over the years for want of a decent tractor.
Lots of farmers have lost their lives for want of a decent tractor with working handbrakes etc.
Lots of precious hours are wasted on farms every year using outdated machines with small working widths or low power because of lack of a decent tractor.
Lots of farmers experience chronic back pain from sitting for long hours in badly designed tractors.
Lots of farmers have gone broke /faced distressing repossessions over tractor purchases over the years.
Then of course there is the environmental aspect too.
The reasons for updating tractors/machinery are as many and as varied and as valid as putting up a shed or installing a new milking parlour.
Saying that farmers will go mad buying shiny new fendts etc is just a spurious argument most will just buy a safe comfortable work environment that would protect their life a bit more. Btw I am not a tractor sales man.
I drive a 1992 zetor 8111(without handbrake) and see no possibility of an upgrade on the horizon out of farm income.
But I'm grand I'm young and able bodied and can tolerate her.

20silkcut

J.O. Farmer wrote: »

If you get a lump sum you are making income.
If you spend it on machinery you are exchanging 1 asset (money) for another (machinery). The net effect on the balance sheet is zero. Depreciation is then allowed as an expense each year to allow for the decreasing value of the asset.
In certain circumstances such as redundancy the value of the lump sum is divided by a number of years to get the value taken as income in that year.

Didn't spot this post earlier. You say the net effect on the balance sheet is zero but what about the effect on cash flow and ability to pay. When you exchange money for a tractor you are hammering cash flow . Agricultural contracting excluded a tractor or machine does not instantly or visibly start spewing out money once bought unlike other assets in other industries. It is a workplace improvement asset. This would prevent the purchase of machines for most farmers or force them into borrowing.