According to the CSO Yearbook of Ireland 2016, Ireland’s average wage was €36,519, while Ireland’s farmers earned an average of just €26,303 (National Farm Survey 2016). Direct EU Payments averaged €17,168 per farm representing 65% of average farm income.
Given that statistic, 15th May 2017 is one of the most important dates for farmers in the farming year. This is the deadline for submission of the farmers Basic Payment Scheme (BPS) application. Scheme payments should start arriving in farmer’s bank accounts in early October. The BPS is crucial to the financial viability of many farms in Ireland.
Philip O’Connor, Agriculture Support Manager with IFAC Accountants said “Approximately 125,000 farmers receive BPS payments each year in Ireland. This year it is compulsory to make applications online which can be challenging for some, particularly if there have been changes in their farming circumstances in the last year”.
It can be a stressful time for farmers as errors on this application can result in payments being withheld.
Philip advises farmers do the following before submitting their applications:
- Employ a recommended agri advisor to help you complete your application. This is money well spent considering the importance of the payment to the financial wellbeing of the farm.
- If transferring BPS to a new entity (LTD, partnership, joint herd, family member etc.) ensure that both your accountant and agri-advisor are fully aware of your objectives and the potential implications. Failure to brief both your accountant and agri-advisor on the changes taking place can result in significant taxes and or loss of/reduction in BPS.
- Give yourself time – do not leave this application until the last minute.
When reviewing your application, Philip advises the following questions be considered to ensure your application is accurate:
- Am I farming more / less land than last year?
- Am I leasing in /out land which wasn’t previously on my application?
- If leasing in / out new land have I leased in /out the BPS correctly with this land?
- Have I bought / sold / inherited / been gifted land in last year? And have I transferred in BPS correctly?
- Have I declared all of the land I am farming correctly on my BPS application?
- Have I changed farming structure – Limited Company, Registered Farm Partnership, Joint herd number?
- If so I must transfer BPS to the new structure, have I declared all of the land correctly in the name of the new business structure?
“It is critical to understand that some changes to your farm structures can jeopardise BPS payments or incur tax implications. Seek professional advice before submission to avoid creating additional challenges for your farm viability” concluded Philip.