Bank of Ireland is encouraging farmers across the country to engage with their financial advisers, as they face having to pay larger tax bills this November.
The bank warned that record farm profits across the agricultural industry in 2022 will likely to “lead to significantly higher tax bills”, depending on how farm business operations are structured.
It said that this is particularly relevant in the dairy and tillage sectors.
In a statement, Bank of Ireland said: “Cashflows are tighter in 2023 as a result of weaker farmgate prices and input costs remaining high this year.
“After spending on feed and fertiliser, tax bills are often the most significant annual expense faced by many farmers.”
Agri development manager at Bank of Ireland, Pat Byrnes said: “Record farm output prices helped cover the rise in production costs in 2022, but cashflows are tighter this year and we are seeing some farmers coming under pressure.”
According to latest research from Teagasc, the average family farm income (FFI) for Irish dairy farmers stood at €150,884 last year.
According to the National Farm Survey 2022, this figure, which is based on a farm size of 65ha, is up by 53% when compared to the 2021 level and was driven by a sharp rise in milk prices.
The data shows that the average income on dairy farms last year was €2,332/ha. This reflects a year-on-year increase of €794/ha.
Bank of Ireland
Meanwhile, Bank of Ireland recently told Agriland that fertiliser application rates, slurry spreading quantities and stocking rates will be reviewed as part of its lending process.
Each farm’s environmental key performance indicators (KPIs) will now be incorporated into the lending process, according to Bank of Ireland.
The bank added that it has “tailored” products to support farmers looking to make investments that “improve” the environmental sustainability of their farms.
It said this includes investing in infrastructure, such as slurry storage units or solar panels.