ICMSA say farmers faced with choice between feeding their animals this winter or paying tax on 2025 earnings ”that are long gone”

The Chairperson of ICMSA’s Farm Business Committee, Pat O’Brien, has said that “very hard choices” are coming down the line at farmers as tax bills from 2025 start coming through the letter boxes just as calculations are being done frantically on how to ensure that their animals will have enough fodder for the coming winter.  Mr O’Brien said that Revenue will have to understand that it’s not a case of farmers trying to avoid their liability but rather that “they simply don’t have the money to do both: pay their 2025 tax bill and buy the fodder that will be necessary to get their herds through the winter after a summer of unprecedented low grass growth”.

“In the continuing absence of an Income Volatility Scheme that could deal with precisely this kind of extreme situation, there has to be a greater level of understanding from Revenue in relation to tax payments. Farmers also need clear guidance on the different options available to manage their 2025 tax liabilities.  Phased Payment Arrangements are an option, but they come with an interest charge. That is simply unfair and penal. People only enter these arrangements because they have to preserve enough cashflow to keep their businesses operating. Penalising them with interest on top of that is unreasonable and just puts people trying to do the right thing in a ‘deeper hole’.  It’s hardly the farmer’s fault that weak milk and beef prices have wiped out the cash that was generated last year. Many farmers have already used last year’s income just to keep their farms viable through 2026, yet they are now expected to pay tax retrospectively on profits that no longer exist in their bank accounts”, said Mr O’Brien.

“ICMSA believes Revenue has to be fair to farmers in these circumstances. The interest charge on Phased Payment Arrangements for farmers should be removed immediately. There should also be a clear, written commitment from Revenue outlining the practical supports available to farmers who are genuinely struggling to meet their tax obligations”, he continued.

“For some farms, the choice is stark – having enough money to buy fodder and keep livestock fed or keeping the taxman happy. That means that the choice is between keeping a farm viable or meeting a tax liability on earnings that are long gone. That’s the reality of it and we want Revenue to work constructively with the sector rather than adding further financial pressure at an already difficult and very fraught time.”

Mr O’Brien dismissed the idea that Income Averaging was a solution to the problem of wildly erratic farm incomes.

“Many accountants can’t even advise farmers to go into income averaging because it could crucify them. After last year’s profits and the good year in 2022, income averaging could well be counterproductive. We have a major problem with wildly erratic and volatile incomes in farming and our taxation system is actually compounding that problem; ICMSA has designed and recommended several changes that have worked in other jurisdictions and which we are positive would work here, but it seems that the officials responsible either don’t understand or don’t care that the present system is exacerbating an already flawed system of farm income taxation”, said Mr O’Brien.

ICMSA is advising any farmer who is concerned about meeting their tax obligations to engage early with their accountant, tax adviser, or other suitably qualified professional to discuss the options available.

Ends      8 September 2026

Pat O’Brien, 087-4904424

Chairperson, ICMSA Farm Services Committee

Or

Cathal MacCarthy, 087-6168758

ICMSA Press office