Ireland’s average wage was €36,519, according to the CSO Yearbook of Ireland 2016. Meanwhile, Ireland’s farmers earned an average of just €26,303, according to the National Farm Survey.
Direct EU payments averaged €17,168 per farm – representing 65% of average farm incomes, according to Philip O’Connor of IFAC Accountants.
Given that statistic, May 15, 2017, is one of the most important dates for farmers in the farming year. This is the deadline for submission of the Basic Payment Scheme (BPS) application. Scheme payments should start arriving in farmers’ bank accounts in early October. The BPS is crucial to the financial viability of many farms in Ireland, says IFAC.
It can be a stressful time for farmers as errors on this application can result in payments being withheld. O’Connor made the following recommendations:
- Employ a recommended agri-advisor to help you complete your application. This, he claims, is money well spent considering the importance of the payment to the financial well-being of the farm.
- If transferring BPS to a new entity (limited company, partnership, joint herd, family member, etc) ensure that both your accountant and agri-advisor are fully aware of your objectives and the potential implications. Failure to brief both your accountant and agri-advisor on the changes taking place can result in significant taxes and/or loss of or reduction in BPS.
- Give yourself time – do not leave this application until the last minute.
When reviewing your application, consider the following questions to ensure your application is accurate:
- Am I farming more or less land than last year?
- Am I leasing in or out land which wasn’t previously on my application?
- If leasing in or out new land have I leased in /out the BPS correctly with this land?
- Have I bought, sold, inherited or been gifted land in the last year?
- Have I declared all of the land I am farming correctly on my BPS application?
- Have I changed farming structure – limited company, registered farm partnership, joint herd number, etc?
It is critical to understand that some changes to your farm structures can jeopardise BPS payments or incur tax implications. IFAC is urging that farmers would seek professional advice, before submission, to avoid creating additional challenges.