Part time farming and tax

Juniorhurler

I am a part time farmer and have been registered for tax for years now but most of the time I get tax refunds from my PAYE contributions as I mostly make a loss on the farm due to upgrading what were rough holdings when I got them (some would say they are still rough:D)

Well here is my question. This year from a rough glance I have made a loss of about €20k due to drainage and intensive reseeding. I pay a lot of tax at 40%, so for the accountants out there will I get back 40% of 20k or how do they work it out? The biggest loss I made before this year was €2k so I have never had such an interest before.

lakill Farm

the max refund you can receive back is the amout of tax you have paid.

blue5000

OP are you claiming the vat back on the reclaimation/drainage work? I'm not an accountant but you may not be able to write this off all in one year, I'm open to correction but I think drainage work can be written off over 2 years, other capital expenses are normally written off over 7 years.

What I'm trying to say is it might be better to write off stuff over a longer timeframe and just pay some tax at a lower level over a few years, rather than trying to avoid paying any tax for one year.

ml100

reclaimation is a capital investment and is written off over 7 years, here's some info on PAYE tax refunds

http://www.examiner.ie/business/farming/you-cant-offset-hobby-farming-losses-but-171216.html

Juniorhurler

blue5000 wrote: »

OP are you claiming the vat back on the reclaimation/drainage work? I'm not an accountant but you may not be able to write this off all in one year, I'm open to correction but I think drainage work can be written off over 2 years, other capital expenses are normally written off over 7 years.

What I'm trying to say is it might be better to write off stuff over a longer timeframe and just pay some tax at a lower level over a few years, rather than trying to avoid paying any tax for one year.

Yeah i will be claiming the VAT back but this will only amount to about 400. The rest of the drainage expense is for stone which i did a hay for stone exchange with a quarry owner. Seed, fert., contractors etc come in for the rest so most is not a multiple year write off. There are also some fairly hefty interest repayments too unfortunately.

Tipp Man

ml100 wrote: »

reclaimation is a capital investment and is written off over 7 years, here's some info on PAYE tax refunds

http://www.examiner.ie/business/farming/you-cant-offset-hobby-farming-losses-but-171216.html

Interesting article - wonder how revenue determine a hobby farm