Economics of buying a new Tractor

Most of Northern Ireland farmers are vat registered and they are surprised to hear the southern boys are not.

I often wondered if you could get away with setting up a separate company registered for VAT, and then "hire" that company to do your work.

You'd be billed + 13.5% VAT on the work, but for bigger lads with a lot of machinery, it might make sense. It would also insulate that end of things from your overall farm (although that in itself might leave it harder to get loans).

Some farmers in companies are doing that. They’ll have the machinery in a family members name.

What part of what I said was incorrect.

I meant as in setting up SodiumCooled Ltd purely as an agricultural hire/contracting business. Buying all your machinery through them and then billing your farm for work which coincidentally matches up with SodiumCooled Ltd costs and repayments. Where you would be SodiumCooled Ltds only customer. Obviously wouldn't be applicable for grant aided machinery. Any savings would only be due to VAT rate differentials.

What you are talking about is lads who already have a company, buying stuff for the farm through it but paying for it with (and writing it off against) income from that other company.

If you want to get full tax relief on the new tractor, costing €80,000, all you have to do is keep the first tractor.

But then you have to fork out 35,000 more. Some people might prefer to do that but most don't have the luxury of having 2 good tractors on the farm.

So, why should you get tax relief on the full €80,000 tractor is you are only forking out €45,000. Makes so sense. The deferring of the balancing charge of 35,000 is a concession. Its not to be abused.

Farmer Phil put up a video yesterday of the Fleming Company, that make the various farm machinery. Watch the video from 26 mins on, he talks about how they are still playing catch-up from the effects of Covid. I'd imagine it's teh same with all tractor manufacturers. This has led to the crazy prices for secondhand ones. ...... or is it just wishful thinking on my part.

A "FLEMING" GOOD TRAILER THAT!!!!! (youtube.com)

please show me all the incorrect parts so.

Thank you mr.stonewall.

I do my best to offer good advice.

In that case, they can claim VAT back on the full amount of the new machine. But as they did not claim VAT on the first machine, they do not have to pay VAT on the trade in proceeds.

Ah our new Dept Ag Minister has never got his hands dirty in his life. Guess where his first media engagement was the day after he was elected into office? Maybe he visited a farm to see how they're coping with slurry during the wettest year in decades, Nope, did he visit a farm to hear about the devastating effects of Tb, Nope again; did he call to a mart to hear about why farmers are protesting across Europe about high energy costs and carbon taxes. Nope wrong again, he called to the RSPCA offices to see wee tabby the stray cat and poppy the abandoned poodle.

I've nothing against any animal but I doubt they would have been my priority for my BIG first public engagement. I think this will tell us a lot about where farming will be on his agenda in the next number of years!!

I was chatting to my wife last week, about what we would do if she won the lottery (i don't ever do it as I would be afraid I'd win, it would ruin the children).

I personally wouldn't take a brand new tractor because of the level of guilt. Scratch the paint, crack the mirror, going in to the new cab, with wet and slurry on you.

Like another farmer said one time, “if I won the lotto I’d stay farming away until it’d be all gone!”

Yes, if you are not VAT registered.

Because he's a farmer. He could sell the farm and it would be like winning the lotto but he wouldn't be happy without the wet and sh1t.

Know nothing but see arion 410 with 130 hours for sale with john deere dealer TFM ( clonmel ? ) Seems to be discount over new price?