Budget 2008 - Farm Taxation

The Farmer’s Flat Rate Addition

The rate of the flat rate addition payable by VAT registered traders on purchases from non-VAT registered farmers remains unchanged at 5.2%.

Tax relief on the dissolution of farm partnerships

A new relief from Capital Gains Tax on the dissolution of farm partnerships will be introduced in the Finance Bill. The relief will run for a period of 5 years and full details will be contained in the Finance Bill.

Milk Production Partnerships

Where a farmer on income averaging enters a milk production partnership the provisions that result in a claw back of income tax will no longer apply.

Sugar Beet Diversification

Provision is being made to allow farmers in receipt of the Diversification Aid element of the Sugar Beet Compensation Package to spread these payments over six years for the purpose of calculating taxable income. More information will follow.