asked the Minister for Finance if he will consider full depreciation of capital allowances for the income assessment of farmers in view of the serious situation being experienced by the agricultural machinery trade; and if he will make a statement on the matter.
Written Answers. - Farmers' Income Tax.
294.
The restriction on accelerated capital allowances available to farmers in respect of plant and machinery has the effect of deferring to later years part of the extra capital allowances. It is intended to discourage over-investment in plant and machinery for the purpose of reducing or eliminating income tax liability. The restriction does not apply to fixed plant installed for use in farm buildings. In addition, full allowances are given in respect of ordinary wear and tear on plant and machinery, expenditure on farm buildings and expenditure on land reclamation, drains, fences, holding yards and roadways. There is no evidence that the restriction acts as a disincentive to genuine investment in farming.
295.
asked the Minister for Finance if he will consider the inclusion of capital allowances and losses in previous years allowable against gross income assessment under the health, income and youth levies for farmers; and if he will make a statement on the matter.
The income levy for all self-employed persons, including farmers, is based on the person's gross income for tax purposes and is comparable to the income basis used for PAYE taxpayers. The same base applies in the case of health contributions and youth employment levy.
296.
asked the Minister for Finance if he will state, in view of the current year's assessment for farmers' income tax, if there are any proposals to issue a £600 allowance to those in schedule D who were paying farmer's income tax.
From the income tax year 1983-84 onwards, farmers are required to pay their income tax in one instalment on 1 October. This change placed farmers in the same position regarding payment dates as other self-employed persons assessed under Schedule D, who pay tax on the basis of the preceding year's earnings. It did not put farmers in the same position as PAYE taxpayers who are entitled to the £600 allowance referred to by the Deputy.