Tax in Farming

Grueller · 20-10-2020 10:05pm

Sugarbowl wrote: »

Without going off topic, what happens when you get the pension and still farming? Is it taxable? Does the accountant include it as wages similar to an off farm job in the books?

You are entitled to earn €18,000 tax free as pensioner. Any thing over that is taxable regardless of where you earn it, be that pension, farm or other income.
If you are a married couple over pension age that is €36,000 combined tax free.

whelan2 · 22-10-2020 8:41am

Is there an extension to the pay and file deadline this year?

duffysfarm · 22-10-2020 9:25am

10 December

whelan2 wrote: »

Is there an extension to the pay and file deadline this year?

wrangler · 22-10-2020 11:26am

Grueller wrote: »

You are entitled to earn €18,000 tax free as pensioner. Any thing over that is taxable regardless of where you earn it, be that pension, farm or other income.
If you are a married couple over pension age that is €36,000 combined tax free.

Just realised that since all the corresondence from Inland Revenue over the last few days, Unreal concession for oldies now with that and up to €80000 tax free on leases

duffysfarm · 22-10-2020 11:32am

sorry - when you say inland revenue do you mean HMRC or the Revenue Commissioner?

wrangler wrote: »

Just realised that since all the corresondence from Inland Revenue over the last few days, Unreal concession for oldies now with that and up to €80000 tax free on leases

893bet · 22-10-2020 11:44am

wrangler wrote: »

Just realised that since all the corresondence from Inland Revenue over the last few days, Unreal concession for oldies now with that and up to €80000 tax free on leases

Is that not the same as for anyone under 65 also? Have the same tax free allowance and can lease tax free?

ml100 · 22-10-2020 12:01pm

Maren Creamy Tattoo wrote: »

Our farm basically never makes a profit everything has been pumped back into it incl the SFP for many years building sheds, buying machines, improving the yard etc. I remember when my father took over first he was getting thousands back in tax for the first few years (all tax he was paying off farm). Then his accountant said he had to stop using his off farm tax.

I’m starting out now and want to maximise the tax savings against my off farm income but it’s a pain if I can’t keep writing off stuff against tax paid off farm as there likely won’t be enough farm income to fully use up all the tax write offs possible.

The profit you have to make every x years is profit before capital depreciation, you may be making a profile before you write off the shed/machinery costs etc

Earnshaw · 22-10-2020 12:21pm

Well if profits are on the high side can't farm shed "repairs" be done as they can be written off over 1 year instead of (whatever amount of years it is) for buildings and (8years or whatever amount of years it is) for machinery?

Tonynewholland · 22-10-2020 12:24pm

Earnshaw wrote: »

Well if profits are on the high side can't farm shed "repairs" be done as they can be written off over 1 year instead of 15 for buildings and 8 years for machinery?

I’ve never heard of 15 years

jaymla627 · 22-10-2020 12:32pm

Earnshaw wrote: »

Well if profits are on the high side can't farm shed "repairs" be done as they can be written off over 1 year instead of (whatever amount of years it is) for buildings and (8years or whatever amount of years it is) for machinery?

Yeah pretty above-board, but vat cant be claimed back on the cladding steel etc on "repairs"

22-10-2020 2:44pm

jaymla627 wrote: »

Yeah pretty above-board, but vat cant be claimed back on the cladding steel etc on "repairs"

Does anyone ever check this? Never mind farm "repairs " going against VAY I've even heard of lads putting in stuff they are buying for a house build etc as a farm VAT reclaim.

Earnshaw · 22-10-2020 3:02pm

Maren Creamy Tattoo wrote: »

Does anyone ever check this? Never mind farm "repairs " going against VAY I've even heard of lads putting in stuff they are buying for a house build etc as a farm VAT reclaim.

Can you both write off the "repairs" as a capital expense AND claim the VAT at a later date?

Pinsnbushings · 22-10-2020 6:53pm

Earnshaw wrote: »

Can you both write off the "repairs" as a capital expense AND claim the VAT at a later date?

No as I see it repairs are not treated as a capital excpense,
they are a cost like meal or fert, 100 percent of the repair cost is taken off your profit in that year.. Vat can't be reclaimed.

Earnshaw · 22-10-2020 9:01pm

Pinsnbushings wrote: »

No as I see it repairs are not treated as a capital excpense,
they are a cost like meal or fert, 100 percent of the repair cost is taken off your profit in that year.. Vat can't be reclaimed.

Farm Buildings Repairs are a capital expense.

The question is can repairs be used as a capital expense whilst also reclaiming the VAT on them at a later point in time.

Dinzee Conlee · 22-10-2020 9:46pm

Earnshaw wrote: »

Farm Buildings Repairs are a capital expense.

The question is can repairs be used as a capital expense whilst also reclaiming the VAT on them at a later point in time.

I think the VAT form states that VAT can’t be reclaimed on repairs...

See page 2
https://www.revenue.ie/en/vat/documents/form-vat58.pdf

893bet · 22-10-2020 9:57pm

Earnshaw wrote: »

Farm Buildings Repairs are a capital expense.

The question is can repairs be used as a capital expense whilst also reclaiming the VAT on them at a later point in time.

Repairs are not a capaital expense usually. Maybe the full reroofing of a shed could be classified as a capital investment but the average repair is not as far as I have been informed by my accountant.

ruwithme · 22-10-2020 10:02pm

I suppose accountants differ and some lads pay professional fees,and a bit of tax.

Pinsnbushings · 22-10-2020 10:11pm

Earnshaw wrote: »

Farm Buildings Repairs are a capital expense.

The question is can repairs be used as a capital expense whilst also reclaiming the VAT on them at a later point in time.

No cant claim vat. What i meant was farm building repairs aren't treated the same as a capital expense such as a new farm building, machinery etc. in tax terms, which are written off over a number of years. The repair is written off in 1 year.

28-10-2020 9:56pm

Gracelynn Obnoxious Body wrote: »

Does anyone ever check this? Never mind farm "repairs " going against VAY I've even heard of lads putting in stuff they are buying for a house build etc as a farm VAT reclaim.

I’ve come across a fair few of your posts giving tax and accountancy advice to fellow farmers. I think the mods seriously need to add a note to your signature advising posters to ignore your advice as you generally advise tax evasion (not avoidance).

Over the last few months you have admitted;
- claiming back VAT back on buildings which is grand but then not telling your accountant which means you are over claiming for expenses in your tax return
- advising people to claim all their diesel expenses from a very long commute, revenue are not stupid that will stick out like a sore thumb. Also saw you advise people to claim diesel from wife’s car which has nothing to do with farm.
- mentioned claiming household electricity bills (fine to claim a small bit but stupid otherwise)
- you are now talking about sneaking in a private house build into your farm expenses. I’ve seen you reference that you are building your own house!!!!!
- in this thread you mention your farm doesn’t make a profit because “ keep writing off stuff against tax paid off farm”. Revenue are not fools they have sophisticated software that can benchmark your farms profit and expenses at expense roll up level (eg motor exps) against your peers. You give them all the information they need via the detailed form 11 tax return.

Some day your farm may be audited by the revenue and from reading on how you run your farm you are going to be rode in back taxes and penalties (which usually equal 100% of the taxes you evaded do 2x)

Above post seems stalkish but I keep coming across dodgy tax advice and in most cases your name is against it

Just to clarity, pretty much all self employed people will sneak in the odd private invoice, I do too but you take the micky. Good luck to Gracelynn Obnoxious Body trying to claim vat58 / income tax deduction on their private house build

Dunedin · 28-10-2020 10:07pm

Mayo_fan wrote: »

I’ve come across a fair few of your posts giving tax and accountancy advice to fellow farmers. I think the mods seriously need to add a note to your signature advising posters to ignore your advice as you generally advise tax evasion (not avoidance).

Over the last few months you have admitted;
- claiming back VAT back on buildings which is grand but then not telling your accountant which means you are over claiming for expenses in your tax return
- advising people to claim all their diesel expenses from a very long commute, revenue are not stupid that will stick out like a sore thumb. Also saw you advise people to claim diesel from wife’s car which has nothing to do with farm.
- mentioned claiming household electricity bills (fine to claim a small bit but stupid otherwise)
- you are now talking about sneaking in a private house build into your farm expenses. I’ve seen you reference that you are building your own house!!!!!
- in this thread you mention your farm doesn’t make a profit because “ keep writing off stuff against tax paid off farm”. Revenue are not fools they have sophisticated software that can benchmark your farms profit against your peers. You give them all the information they need via the detailed form 11 tax return.

Some day your farm may be audited by the revenue and from reading on how you run your farm you are going to be rode in back taxes and penalties (which usually equal 100% of the taxes you evaded do 2x)

Above post seems stalkish but I keep seeing dodgy advice and in most cases your name is against it

Just to clarity, pretty much all self employed people will sneak in the odd private invoice, I do too but you take the micky. Good luck trying to claim vat58 / income tax deduction on your private house build

And that’s only the stuff they admitted.......

Earnshaw · 29-10-2020 6:00pm

Mayo_fan wrote: »

I’ve come across a fair few of your posts giving tax and accountancy advice to fellow farmers. I think the mods seriously need to add a note to your signature advising posters to ignore your advice as you generally advise tax evasion (not avoidance).

Yes but doesn't Revenue in a sort of a way allow for this? Like they've decided that given the incomes are so crap that this leeway sort of compensates the farmers. And it's up to individual farmers themselves in what way they want to exploit these things. Maybe Revenue do cause hardship in an audit but there'd be a lot of work in clawing back a few quid towards electricity, diesel and buildings surely.

A bit like in the case of chicken farmers which was exposed recently... https://www.irishtimes.com/business/agribusiness-and-food/chicken-farmer-sues-revenue-over-failed-family-business-1.4260301

duffysfarm · 29-10-2020 8:48pm

no, no, no.
Revenue can not and will not turn a blind eye to the practices of any one sector. i work as an accountant and i read that article before on irish times and i cant figure out what is going on

Earnshaw wrote: »

Yes but doesn't Revenue in a sort of a way allow for this? Like they've decided that given the incomes are so crap that this leeway sort of compensates the farmers. And it's up to individual farmers themselves in what way they want to exploit these things. Maybe Revenue do cause hardship in an audit but there'd be a lot of work in clawing back a few quid towards electricity, diesel and buildings surely.

A bit like in the case of chicken farmers which was exposed recently... https://www.irishtimes.com/business/agribusiness-and-food/chicken-farmer-sues-revenue-over-failed-family-business-1.4260301

Earnshaw · 29-10-2020 10:07pm

duffysfarm wrote: »

no, no, no.
Revenue can not and will not turn a blind eye to the practices of any one sector. i work as an accountant and i read that article before on irish times and i cant figure out what is going on

According to the whistleblower, Revenue turned a blind eye to the sector.

Tax in Farming

Comments