Tax Bill!

whelan2

Going to be a tough one this year. 5 year averaging helped me a good bit as 2012/3 were crap. Hows everyone else getting on? Spoke with someone yesterday and he still doesnt know what he owes. Pity the deferral system wont be in this year , but it all has to be paid in the end:mad:

mahoney_j

whelan2 wrote: »

Going to be a tough one this year. 5 year averaging helped me a good bit as 2012/3 were crap. Hows everyone else getting on? Spoke with someone yesterday and he still doesnt know what he owes. Pity the deferral system wont be in this year , but it all has to be paid in the end:mad:

Refund on the way but prelim tax will be up a bit on what I paid last year .ive known since early March last years position

A cow called Daisy

Biggest tax bill in years - but knew that was going to be the case at end of last year as all bills were cleared and still had few euro for myself. All due to reducing stock numbers the previous year so less inputs and similar output.
And I'm not into buying something I don't need to reduce a tax bill.
Tax issue be different for 2016 accounts

Mooooo

You can use this year's figures to reduce the preliminary tax you pay for next year's bill iykwim. Instead of the preliminary being the same as 15 tax once you have are close enough to what the actual 16 tax bill will be you can pay that figure as the preliminary figure

Buford T. Justice XIX

whelan2 wrote: »

Going to be a tough one this year. 5 year averaging helped me a good bit as 2012/3 were crap. Hows everyone else getting on? Spoke with someone yesterday and he still doesnt know what he owes. Pity the deferral system wont be in this year , but it all has to be paid in the end:mad:

The deferral is in this year. But it can only be used once every 5 years, I think.

Our accountant took a load of clients off averaging this year as it's supposed to be helping us?

lakill Farm

I found income averaging to be very hit and miss , especially the older 3 year model.

Tax bills on average are lower than last year but cashflow is tighter so they are more of a struggle for most self employed

blue5000

Stock valuations tend to be on the low side, so there might be a bit of leeway there. A lot of us had cap expenses in 08-09 they are coming to an end. But if there were bad years, those allowances may not have been used and just carried forward, check it out with your accountant, you dairy lads have my sympathy being in the enviable position of having to pay tax:D

whelan2

Buford T. Justice V wrote: »

The deferral is in this year. But it can only be used once every 5 years, I think.

Our accountant took a load of clients off averaging this year as it's supposed to be helping us?

Are you sure its in this year, accountant said its not in until next year

Buford T. Justice XIX

whelan2 wrote: »

Are you sure its in this year, accountant said its not in until next year

I'm nearly certain. There was an article in one of the farming papers saying that it was available this year and my accountant told me to pull out of income averaging rather than use that deferral.

Jexbullcalf

Anyone in a limited company? Thinking of heading down this road next yr myself as milk could be moving upwards.
Fecking tax man is making more money out of the farm then me!!!

lakill Farm

Jexbullcalf wrote: »

Anyone in a limited company? Thinking of heading down this road next yr myself as milk could be moving upwards.
Fecking tax man is making more money out of the farm then me!!!

after having 3 strong enquires relating to operating the farm as Limited company.

you really need to look at it on a one to one individual approach.

Personal circumstances, borrowing, future borrowings and facilities.

cute geoge

What numbers are we talking about to make it worthwhile to operate as ltd. company for a single dairy farmer.I am crucified with last year's tax bill and most of my capital expenses are now nearly used up as well .

Keepgrowing

I'm not sure you should ever make changes just for tax purposes. By all means limit it.

We changed things here but took education, sucession, future borrowing and tax planning into account when doing. Spent 2 years transitioning to do it the way we wanted.

All I say is consider more than just tax of making any changes

rangler1

Keepgrowing wrote: »

I'm not sure you should ever make changes just for tax purposes. By all means limit it.

We changed things here but took education, sucession, future borrowing and tax planning into account when doing. Spent 2 years transitioning to do it the way we wanted.

All I say is consider more than just tax of making any changes

A lot of mckey mouse operations became Companys because it was fashionable in the last few years and beginning to doubt their decision now, A lot of the push was coming from IFAC, probably because of the extra work they got out of it

Bullocks

Keepgrowing wrote: »

I'm not sure you should ever make changes just for tax purposes. By all means limit it.

We changed things here but took education, sucession, future borrowing and tax planning into account when doing. Spent 2 years transitioning to do it the way we wanted.

All I say is consider more than just tax of making any changes

What do you mean by education and succession ? How did it fit in with the tax planning ?

rangler1

Bullocks wrote: »

What do you mean by education and succession ? How did it fit in with the tax planning ?

You'd need to be optimistic to put those two in the one sentence.....will there be another generation farming if there's a proper education available to them.

Bullocks

rangler1 wrote: »

You'd need to be optimistic to put those two in the one sentence.....will there be another generation farming if there's a proper education available to them.

If they have any sense then no , but alot of us wouldnt be bursting with sense when it comes to farming
It wouldnt really be viable on our farm for the kids to bother but you never know whats coming down the line either

Keepgrowing

rangler1 wrote: »

You'd need to be optimistic to put those two in the one sentence.....will there be another generation farming if there's a proper education available to them.

Lol
Proper education is the building block for proper farmers.

Succession is about more than farming it's about the transfer of high value assets and that takes planning, not the day you get sick but years in advance.

J.O. Farmer

rangler1 wrote: »

You'd need to be optimistic to put those two in the one sentence.....will there be another generation farming if there's a proper education available to them.

Depends on your definition of proper education. Maybe it could mean sending the smart child to ag college and the idiot children to the priesthood or the nuns.

I got a proper education and went to college got a good degree and postgrad and I'm still farming although it was never and will never be a full time enterprise here.
I have siblings who were less interested in academics and are successful too in their areas but no interest in farming.
My point is that a proper education won't put off a successor to carry on in some capacity if they have the interest and the lack of it won't keep them at it if not interested.

Welding Rod

Thought there was no money in farming. Where's all these tax bill coming from?
If you want no or low tax bills try sucklers. They give plenty headaches but tax isn't the bigger one

rangler1

J.O. Farmer wrote: »

Depends on your definition of proper education. Maybe it could mean sending the smart child to ag college and the idiot children to the priesthood or the nuns.

I got a proper education and went to college got a good degree and postgrad and I'm still farming although it was never and will never be a full time enterprise here.
I have siblings who were less interested in academics and are successful too in their areas but no interest in farming.
My point is that a proper education won't put off a successor to carry on in some capacity if they have the interest and the lack of it won't keep them at it if not interested.

Think you;ve answered your own query there, I'm referring to fulltime farming, you're talking about farming instead of laying golf on a Saturday.
Each to their own, but if you're on a good salary and doing parttime farming well and making maybe 10 or 20000 out of it, Whatever about getting disillusioned with the extra work, you'd definitely cop on when you pay the 52% tax on the profits and realise the time it takes you away from real life

J.O. Farmer

rangler1 wrote: »

Each to their own, but if you're on a good salary and doing parttime farming well and making maybe 10 or 20000 out of it, Whatever about getting disillusioned with the extra work, you'd definitely cop on when you pay the 52% tax on the profits and realise the time it takes you away from real life

See that's where the system of farming may change in future generations. The full time dairy farm may change to something else more suited to part time with more help hired in.
It depends on how you look at farming. If you enjoy farming more than playing golf paying 52% on profit might be better than spending money on golf.
On the other hand if you prefer golf and are disillusioned with the extra work then farming isn't for you and you'll know long before you reach leaving cert.

kowtow

"Only doing it part time" is not a solution to the future of an industry.

If we can't have a farming industry which is a place that our educated children will be proud to work then we have only ourselves (and perhaps our parents) to blame.

We need to stop bemoaning it and start doing something about it.

Bullocks

Welding Rod wrote: »

Thought there was no money in farming. Where's all these tax bill coming from?
If you want no or low tax bills try sucklers. They give plenty headaches but tax isn't the bigger one

Its probably lack of income making it hard to keep back money for tax moreso than the tax itself . Im a fecker for not planning ahead with regards to tax but I'm slowly getting better as the years go on

Panch18

kowtow wrote: »

"Only doing it part time" is not a solution to the future of an industry.

If we can't have a farming industry which is a place that our educated children will be proud to work then we have only ourselves (and perhaps our parents) to blame.

We need to stop bemoaning it and start doing something about it.

Why isn't it the future though Kowtow? Plenty of European countries have dairy farmers who are part time. With tillage and beef it is becoming near impossible for either to provide a proper sustainable household income

Now it's a major problem, because the guy who has a job doesn't need to make any money from the place, the full timer has to make his living. So part timer can sustain much longer periods of low prices. That's just the way it is. Going part time might actually keep farmers going longer than being full time

Keepgrowing

Could the mods seperate this into an "education" thread on f&f. Would be very interesting.

Just a thought

J.O. Farmer

kowtow wrote: »

"Only doing it part time" is not a solution to the future of an industry.

If we can't have a farming industry which is a place that our educated children will be proud to work then we have only ourselves (and perhaps our parents) to blame.

We need to stop bemoaning it and start doing something about it.

I think it's not an issue of pride but more financial. Compare the average industrial wage with the average farm income. Perhaps big dairy farms can compete or maybe tillage? But the other sectors not so much unless we go down the poultry route of contract rearing for meat factories and I don't see that happening.

You're right though we do need to do something.

Buford T. Justice XIX

Education and farming thread opened so all discussion on education to go over there, please.

http://www.boards.ie/vbulletin/showthread.php?t=2057664606#


Right all, back to tax discussion:)

Mooooo

Anyone apply for vat refund recently.? Heard it's taking up to 8 weeks. Have a bit to come back. Bit of work I did last year replaced capital allowances from 09 along with the hit of preliminary I paid last year has eased this year's bill. Id say lads that had a big increase in output last year will have a bit to deal with now, despite the drop in milk price.

farmerjj

Ya its taking 6 to 8 weeks for the refunds(at least it was back in october)

freedominacup

farmerjj wrote: »

Ya its taking 6 to 8 weeks for the refunds(at least it was back in october)

Most of the year so. It was taking that long in late spring. Get the finger out and you'll have a nice shot of santy money.

whelan2

Direct debit for tax came out of account today, last few years it was a few days later and there would be a crossover when milk cheque would come in.

Sami23

whelan2 wrote: »

Direct debit for tax came out of account today, last few years it was a few days later and there would be a crossover when milk cheque would come in.

Wonder are many on here paying much tax. Myself and few lads I know with small farms don't as only have sucklers and drystock so usually can match expenses to income.
I presume it's different story with Dairy and bigger farmers ?

whelan2

Sami23 wrote: »

Wonder are many on here paying much tax. Myself and few lads I know with small farms don't as only have sucklers and drystock so usually can match expenses to income.
I presume it's different story with Dairy and bigger farmers ?

Its a tough one this year as we are paying for 2015 which was a good enough year and funds wouldnt be great this year. Anyway it's paid now

farawaygrass

Sami23 wrote: »

Wonder are many on here paying much tax. Myself and few lads I know with small farms don't as only have sucklers and drystock so usually can match expenses to income.
I presume it's different story with Dairy and bigger farmers ?

Are you part time? I am and I use most of my tax credits on work so any profit on the farm can push me to higher tax bracket

Bullocks

They took money out of my account yesterday , I knew it was going to happen but I'm still sad to see it go

Sami23

farawaygrass wrote: »

Sami23 wrote: »

Wonder are many on here paying much tax. Myself and few lads I know with small farms don't as only have sucklers and drystock so usually can match expenses to income.
I presume it's different story with Dairy and bigger farmers ?

Are you part time? I am and I use most of my tax credits on work so any profit on the farm can push me to higher tax bracket

Yeah I'm part time and use all credits at work too.
Farm only in my name a few years so lucky so far in not having to pay tax.
I just make sure to keep every receipt and put EVERYTHING I can down as expenses

TITANIUM.

Sami23 wrote: »

Yeah I'm part time and use all credits at work too.
Farm only in my name a few years so lucky so far in not having to pay tax.
I just make sure to keep every receipt and put EVERYTHING I can down as expenses

Sorry Sam I'm probably missing something here but why would you not have to pay tax?
Or do you mean that this is your first year paying tax for last year iykwim,

Mooooo

Paying tax is a sign you are making a profit. If you are not you could well be worse off. AS one of the lads said if working that profit could well be taxed at the high rate which is a balls but that's the way it is.

raindodger

bye bye money
Took a bad price for cattle yesterday all for the tax man

Timmaay

Done some serious damage to the bank account funds last 10days clearing a decent few bills (tax man and maize bill being the 2 worst), however with no autumn calvers the September milk cheque was the biggest we've had, alongside that I've worked out I'll only need about 10tons of nuts between now and the start of calving. Upsides of moving away from winter milk definitely.

Sami23

TITANIUM. wrote: »

Sami23 wrote: »

Yeah I'm part time and use all credits at work too.
Farm only in my name a few years so lucky so far in not having to pay tax.
I just make sure to keep every receipt and put EVERYTHING I can down as expenses

Sorry Sam I'm probably missing something here but why would you not have to pay tax?
Or do you mean that this is your first year paying tax for last year iykwim,

Oh I do pay plenty of tax at work but not on farm last few years as didn't make enough money after expenses. Small BPS here also.

Username John

Sami23 wrote: »

Yeah I'm part time and use all credits at work too.
Farm only in my name a few years so lucky so far in not having to pay tax.
I just make sure to keep every receipt and put EVERYTHING I can down as expenses

Do you not have capital allowances as well, if you have done any capital improvements (and if tis only in your name a few years, then I would suspect you have done)

Sami23

Username John wrote: »

Sami23 wrote: »

Yeah I'm part time and use all credits at work too.
Farm only in my name a few years so lucky so far in not having to pay tax.
I just make sure to keep every receipt and put EVERYTHING I can down as expenses

Do you not have capital allowances as well, if you have done any capital improvements (and if tis only in your name a few years, then I would suspect you have done)

Yes I have capital allowances also mostly on machinery purchases which is another reason I've not had to pay tax yet.
And when they run out I intend to purchase a 2nd hand tractor to reduce tax bill in future

lakill Farm

Sami23 wrote: »

Yes I have capital allowances also mostly on machinery purchases which is another reason I've not had to pay tax yet.
And when they run out I intend to purchase a 2nd hand tractor to reduce tax bill in future

what a 1 day old 1050 Fendt? €477,000 list price

jimmy G M

Sami23 wrote: »

Yes I have capital allowances also mostly on machinery purchases which is another reason I've not had axto pay tax yet.
And when they run out I intend to purchase a 2nd hand tractor to reduce tax bill in future

Lakill, whats your professional opinion on buying new machines (without any specific need to do so) specifically to avoid paying tax, especially is borrowing is required. I am skeptical enough myself, i'd rather have 50% of something in my pocket rather than 100% of nothing.

rangler1

jimmy G M wrote: »

Lakill, whats your professional opinion on buying new machines (without any specific need to do so) specifically to avoid paying tax, especially is borrowing is required. I am skeptical enough myself, i'd rather have 50% of something in my pocket rather than 100% of nothing.

I have to admit, if i have the money I'd rather waste it myself than let the public service waste it.
But if you have education fees, etc coming down the tracks, you're better to pay the tax and save the rest.

jimmy G M

rangler1 wrote: »

I have to admit, if i have the money I'd rather waste it myself than let the public service waste it.
But if you have education fees, etc coming down the tracks, you're better to pay the tax and save the rest.

Good man rangler. There might be a lot if sense in that alright.

Sami23

lakill Farm wrote: »

Sami23 wrote: »

Yes I have capital allowances also mostly on machinery purchases which is another reason I've not had to pay tax yet.
And when they run out I intend to purchase a 2nd hand tractor to reduce tax bill in future

what a 1 day old 1050 Fendt? 477,000 list price

No just around 16k on the best tractor I can get with a loader. Every little helps. We're not all big farmers on here so not making massive income at it

Keepgrowing

rangler1 wrote: »

I have to admit, if i have the money I'd rather waste it myself than let the public service waste it.
But if you have education fees, etc coming down the tracks, you're better to pay the tax and save the rest.

+1

Timmaay

I really don't see how a purchase of a tractor is going to solve all your tax "problems" (great problem to have ha). Tax most certainly isn't the overriding factor here where planning capital investments etc, however it certainly is a factor in it, I have tried to spread out my capital investments the last few years, and keep repayment lengths under how long the tax write off is (obv within cash flow constraints), this way I'm keeping a reasonably steady amount of capital tax write off every year, it helps keep the tax bill steady enough every year, other things like purchasing extra fodder when the price is low but good year for cashflow helps also.

My dad wants to trade in the tractor here at the minute ha, it's not the worst idea as the hours are pushing up on it, however he is trying to use the tax saving reasoning on me and I'm just not buying that for now haha, there are other investments we can make that will give a much better roi. I can't be too hard on him either though haha, he's put enough effort in over the years to afford himself the luxury.