Case study one
David is milking 80 cows in Laois. His wife, Mary, does not work off farm, so the farm generates the full family income.
Farm turnover amounts to €300,000, excluding Basic Income Support for Sustainability (BISS). David has earned an average of €65,000 in the last three years. They have two children under the age of 10.
Benefit
With the increase in the married persons’ tax credit and self-employed credit, as well as the benefit from the rise in the standard rate tax band of €2,000, a tax benefit of €775 will occur.
With a 1% reduction in universal social charge (USC), there will be a further benefit of €409. This gives a total gain of €1,184.
A PRSI increase of €65 will partially offset this, leaving a net gain of €1,119. As a flat-rate farmer, the increase in VAT amounts to a gain of €900.
The energy credit of €250 will be a benefit but will be offset by the increased energy and fuel costs.
A double child benefit will be payable prior to Christmas for each child.
Case study two
Aoife is a single dairy farmer in Sligo, milking 80 cows. While the weather impacted her business, costs have not risen as much and she expects to have an income of €50,000 this year. Aoife’s farm is very fragmented and uses approximately 1,500l of road diesel.
Benefit
With the increase in the single persons’ tax credit of €125 and the self-employed credit of €125, as well as the increase of €2,000 in the standard rate tax band, Aoife will be €650 better off per year. A further €259 reduction in USC, offset by a PRSI increase of €50, equates to a net gain of €859.
The VAT increase effect on sales will be a gain of about €860.
Peter is married to Joan and has three children. They have a 90ac mixed farm, sucklers and sheep. They have a car, jeep and a 100hp tractor.
They travel 15,000km in the car, 10,000km in the jeep and burn 1,000l of diesel in the tractor.
Joan cares for her three children full-time.
She also earns €7,200 off-farm. Peter’s farm income amounts to €40,000.
Benefit
With the increase in the married persons’ tax credit of €250, the self-employed credit of €125 and the €150 increase in the home carers credit, a total tax benefit of €525 plus €159 in USC offset by a €40 increase in PRSI will mean a net gain of €644.
The double child benefit payment will be significant. The energy credit, while welcome, will be offset by increased energy cost.
John is a single man and farms 250ac, 100ac of which is owned and the rest is on a long-term lease. Last year, his tillage enterprise had an income of €255,000 and profit of €55,000 which he expects to stay the same this year.
He has land zoned as residential on an outfarm near a major town that is being farmed and he was hoping for some budget relief on the residential zoned land tax (RZLT). Under the budget, he will be able to apply for his land to be de-zoned.
Benefit
John will benefit to the tune of €250 with the increase in the tax credits, the increase in the standard rate band of €2,000 will generate an extra €400 and the rate reduction of 1% in USC will mean an extra €309.
A PRSI increase of 0.1% will cost him €55. All in, this equates to a net extra income of €904. However, the news on the RZLT could be positive and details are awaited as to how this de-zoning could apply.
The increase in the flat-rate rate will not affect John as he is VAT-registered.
Michael is 22 and a recent agricultural college graduate. He is returning home to take over the farm from his uncle. His father is also hoping to gift him the farm in 2024.
The 100ac home farm is currently valued at €1,500,000. They are also looking at selling an out farm of 25ac to buy a piece of land closer to them.
Michael runs his own agri-contracting business making a profit of €45,000 and uses approximately 9,000l of diesel per annum, which could be impacted by a new carbon tax.
Benefit
With a carbon tax increase of 2.6c/l, there will be an impact on his contracting business.
With no carbon tax relief on the fuel used in the agri-contracting business, he will have to pass on the cost. The extension of stamp duty relief and young trained farmer stock relief to the end of 2027 was good news.
Farm consolidation relief is still available and this will allow the land to be sold and purchased with capital tax reliefs minimising the tax.
Changes to the transfer rules in the budget with the ceiling increasing to €400,000 from 2 October 2024 and with changes imminent on agricultural relief to ensure it is targeted to the active farmer, means now is a good time for Michael to examine the transfer options.
He needs to ensure that he can qualify for favourite nephew relief on the land being taken from his uncle.
The income tax changes on tax credits will benefit him by €250, the low-rate tax band increase of €2,000 could benefit him by €400 and the USC change will also benefit him.
PRSI will increase by 0.1% for each year until it reaches 4.7% at a cost this year of approximately €40.
Andrew is a small hill sheep farmer and is married to Alice. They have four children aged between two and 18.
Alice works part-time off-farm and earns €12,000 per annum. Andrew is a recipient of Farm Assist.
Benefit
Andrew would have no income tax/USC liability.
He will have no tax gain on the previous year, but schemes will be vital to his enterprise.
Also, the increase in benefits of €12 per week and the one-off double child benefit payments will be a major help.
The €250 energy credit will be of benefit but the increased cost of energy on electricity and motor fuel will offset this.