asked the Minister for Finance why income tax demands have been made on farmers in the counties of Monaghan and Cavan in respect of the production of broiler fowl, which is a normal part of the agricultural activity of these counties.
Ceisteanna—Questions. Oral Answers. - Income Tax Demands on Farmers.
10.
The production of broiler fowl by persons who are not farmers is a trading activity, the profits of which are chargeable under Schedule D of the Income Tax Acts. Where farmers engage in this activity it is a question of fact whether the activity is ancillary to and forms part of the normal farming operations the profits of which are chargeable on the conventional basis under Schedule B, or whether it is a trading activity, separate and distinct from the occupation of lands for husbandry, which would be chargeable under Schedule D.
Assessments under Schedule D have been raised in certain cases where the Inspector was of opinion that the activities are of such a nature as to constitute a trading activity chargeable under Schedule D. Those assessments are at present under appeal to the Special Commissioners and, pending their determination in the matter, collection of the tax is being suspended.
Does the Minister think it desirable that, where a farmer introduces the most modern methods on his farm, he should be fixed with notice that that brings him in peril of having his income transferred for the purpose of assessment from Schedule A to Schedule D ?
As the reply sought to convey to the Deputy, if it is part of farming activity, it would appear to be exempted from Schedule D but the question whether it is part of farming activity or not is a matter of law and is now subject to appeal.
I may take it the intention is that where this forms part of a farmer's ordinary husbandry, it will not operate to transfer his income to Schedule D? That would be the policy?
That is what I should like to see effected but I am not sure how the law stands.
We can change the law, provided we are agreed on the purpose.