High profits, high tax: Why 2025 could catch farmers out

Higher farm profits usually result in higher income tax liabilities, but the tax liabilities don’t usually manifest themselves until the following year, writes rural accountant Kieran Coughlan

The time lag between when profits are earned and when tax gets paid can lead to farmers getting caught offside.

This year is shaping up to be a year of strong profits for beef, dairy and sheep sectors and it's great farmers can feel they are being rewarded well for the invaluable work they do. 

The sting in the tail is that higher farm profits usually result in higher income tax liabilities, but the tax liabilities don’t usually manifest themselves until the following year.