Question: Calves cost me nearly double this year and feed was dearer over the spring and summer, so I was expecting those extra costs to bring my tax bill down. Instead, my accountant is telling me the bill due this October or November could actually be higher. I can’t understand how that adds up when I know I’ve spent so much more on the farm during 2026. Am I being taxed on the wrong year, or is there something I’m missing about how farm tax works? And what should I be asking my accountant before I sign off on the figures?

Answer: This is a query that many farmers have and the answer comes down to timing.

If you’re an employee, tax comes out of your wages every week or month as you earn it. You never see it. If you’re farming, it doesn’t work like that. Your profit is worked out after the year is finished, usually to 31 December, and the tax on it isn’t paid until the following October or November.

So the bill you’re facing this autumn is on your 2025 profit. Beef prices were strong in 2025 for the most part and profits were up on 2024. That’s what you’re paying for now. What you spent on calves in spring 2026, and on extra fodder over the spring, has nothing to do with the 2025 tax bill due this year. That will come out in next year’s figures.

There’s a second thing worth knowing, and it catches a lot of farmers out. If you bought cattle in 2025 and they were still on the farm on 31 December, that money doesn’t come off your profit yet. It only counts when those cattle are sold.

That means you can have a big tax bill and very little in the bank at the same time. The money isn’t gone; it’s standing out in the yard. Looking only at the balance in the bank can therefore give you a very different impression from the profit shown in your accounts.

Revenue knows that farmers are always working a year behind, so it asks for a payment towards the current year as well. That’s preliminary tax. It’s an estimate of what this year will cost you, paid during this year.

Most farmers simply pay the same as last year’s bill because it’s a figure they know. If you end up paying too much, you get it back. If you pay too little, you’ll owe the difference the following October, and Revenue can charge interest on it.

That’s why an October bill often has two parts: the balance owing on last year and the estimate for this year. When you see the total, it’s important to understand which part relates to which year rather than looking at it as one unexplained tax figure.

Reducing the bill

There are plenty of things that can reduce the bill, including allowances on machinery, sheds and land improvement, stock relief and income averaging, which spreads your profit over five years. Averaging is worth asking about if you’ve had one strong year sitting between poorer ones.

Pension contributions are another important area to discuss with your accountant. A pension contribution made now can reduce your 2025 income tax liability and, in turn, reduce your preliminary tax payment for 2026. That can make a meaningful difference to the overall amount you need to find this autumn.

Don’t look only at your own pension either. Depending on your circumstances, your spouse may also be able to make a contribution to their pension, helping to reduce the household’s overall tax bill. It is worth discussing both with your accountant before the deadline rather than assuming the figure you have been given is final.

The main thing is to talk to your accountant. When you sit down over your accounts, don’t just sign them. Ask what the tax is, when it’s due and why. Ask what options are available to reduce the liability, including whether pension contributions are appropriate. And talk about this year as well as last. How is the farm doing right now?

That conversation matters because the bill in front of you and the costs you’re experiencing today may relate to different periods.

Your higher calf and feed costs matter, but they belong in the 2026 picture rather than changing the tax due on your 2025 profit.

At ifac, we often prepare a set of accounts nine months into the year. It gives a proper picture of where the farm actually stands, so the preliminary tax figure is accurate and you know well in advance what’s coming in October or November each year, with no surprises.

Philip O’Connor is head of farm support with ifac, the professional services firm for farming, food and agribusiness.