Budget 2019 will include a number of budgetary changes which will have an immediate effect on farm incomes, according to agricultural consultancy and professional services firm FDC Group.
Donncha Collins, senior tax consultant with FDC (Farm Development Co-Op), highlighted seven key changes which will have a direct impact on the take-home value of incomes and profits earned by farmers.
The consultant provided expert analysis into the main effects of Budget 2019 as announced by Minister for Finance Paschal Donohoe earlier this afternoon (Tuesday, October 9).
1. Increase in income tax rate
Budget 2019 introduced an increase of €750 in the income tax standard rate band for all earners, from €34,550 to €35,300 for single individuals. Meanwhile, the rate will rise from €43,550 to €44,300 for married one-earner couples.
2. USC changes
Changes to the Universal Social Charge (USC) will apply from January 1, 2019, Collins notes.
The changes include a €502 increase to the €19,372 band ceiling, while the 4.75% rate has been reduced to 4.5%.
3. Broadening of criteria for Income Averaging
Income Averaging will now be available to farmers with off-farm income, Minister Donohoe announced today. This is to “help support more farmers to cope with the problems of income volatility”, the minister said in the Dail earlier this afternoon.
4. Earned income credit boost
Earned income credit has increased by €200 to €1,350, up from the 2018 credit amount of €1,150.
5. Home Carer Tax Credit
The Home Carer Tax credit has also seen an increase – this time by €300 – up to €1,500.
6. Stock relief extension
Existing stock relief measures for farmers have been extended for a further three years through to 2021, according to the budget announced earlier.
7. Income Averaging extension
As well as a broadening of eligibility criteria to include farms with off-farm income, Income Averaging has also been extended for a further three years to 2021, having been due to expire at the end of the year.
Stay tuned to AgriLand for further expert analysis from FDC Group on the impact of Budget 2019 on Irish agriculture.