People in haulage and forestry are celebrating after this week’s Budget.
The owner of a 20-tonne truck sees their annual motor tax bill reduced €4,295 in one fell swoop, and the removal of forestry income from the ‘High Earners Restriction’ for active foresters and farmers means that clear-felling income will be tax-free.
Forestry has long been an income tax free area, in recogniton of the 40 years it takes to grow the crop.
But forest owners were incurring high tax bills because clear-felling more than about 70 acres of trees was landing them in the High Income Earner Restriction zone.
So they were doing only piecemeal harvesting of trees, and the sawmill sector was losing out, due to irregular timber supply.
Now, clear-felling income will be tax-free.
And the haulier who draws away the timber has a big annual tax saving.
Both are breakthroughs for rural Ireland.
And Public Expenditure Minister Brendan Howlin’s assertion on Tuesday that the days of spending cuts are behind heralds similar improvements this week and to come.
Backing up that assertion that times have really changed was the long-awaited move to start ending income tax discrimination against self-employed people such as farmers, described by ICMSA as “historic”.
Since the millennium year, the self-employed have seen PAYE tax credits rise, to the extent of going €1,650 per annum ahead of self-employed tax credits.
They can hope the €550 start in this budget will be trebled, if the economy continues to recover.
Along with this week’s USC reduction and other tax measures, the new €550 tax credit will add over €800 to the average family farm income.
Agriculture Minister Simon Coveney has been able to show how changes made in the last budget led to 27% of respondents in a recent survey by his Department moving from conacre to long-term land leasing, thus strengthening the case for this week’s renewal of four existing tax measures on stock relief and stamp duty relief, retention of agricultural relief from capital acquisitions tax, and introduction of a major new initiative on family transfer partnerships, pending the EU’s approval.
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