The planned extension of slurry storage scheme, which was announced as part of Budget 2023, will need to be formally approved by the Dáil and Seanad.
The time-limited scheme for accelerated capital allowance for the construction of modern slurry storage facilities is expected to run from 2023 to 2025.
The scheme is designed to incentivise farmers to construct slurry storage facilities and to increase the volume of slurry storage at an individual farm level.
Increased slurry storage is aimed at reducing reliance on imported chemical fertilisers, improving water and air quality and working towards the country’s decarbonisation targets.
Extension of slurry storage scheme
The Department of Finance has confirmed to Agriland that while Accelerated Capital Allowance scheme for Slurry Storage Facilities is technically due to expire on June 30 due to a delay with the EU’s Agricultural Block Exemption Regulation (ABER), the “policy intention is to extend it, prior to that date, to at least December 31, 2025”.
According to the Department of Finance: “The taxation of profits from farming and market gardening are charged to tax under Case I of Schedule D and so any claims for relief on such taxes should be submitted to Revenue as part of the annual tax return process.
“Capital allowances for farm buildings are usually deductible at a rate of 15% per annum over a period of six years with the final 10% deductible in the seventh year.
“Plant and machinery are usually deductible at a rate of 12.5% per annum over a period of eight years. However this scheme provides that 100% of the capital expenditure incurred on the construction of slurry storage facilities and associated equipment may qualify for an accelerated rate such that the allowances may be claimed over two years.”
Where expenditure is qualifying, the farmer will be entitled to claim up to a maximum tax benefit of €500,000 per undertaking.
The Department of Finance is currently working with Revenue and the Department of Agriculture, Food and the Marine (DAFM) to examine the regulation in the context of a number of existing agri-tax reliefs and will draft appropriate amendments.
In terms of formally extending the scheme to 2025, the finance department spokesperson said: “A suitable legislative vehicle will be sought by which to implement these amendments.
“However, as with all primary legislation, before any proposed legislative provisions can be enacted, they must first pass through several stages of debate in both the Dáil and Seanad.
“An amendment to extend the relief will require the approval of both of the Houses of the Oireachtas [Dáil and Seanad].”
ICMSA
Meanwhile, the Irish Creamery Milk Suppliers’ Association (ICMSA) said that it had received many calls from confused and anxious farmers in relation to the Accelerated Capital Allowances (ACA) for slurry storage.
ICMSA farm business chairperson, Shane O’Loughlin, said that the scheme is “categorically” open for three years as first indicated in Budget 2023.
O’Loughlin said he contacted the Department of Agriculture, Food and the Marine (DAFM) to officially confirm that the scheme will not expire in June of this year.
The ICMSA is urging farmers who have plans for slurry storage to proceed with their building on the understanding that as long as the costs of the infrastructure is incurred in the three years from January 2023 to December 2025, they will be eligible.