The Minister for Finance, Michael McGrath, has confirmed that a total of 349 farmers were refused VAT exemptions for the “purchase of fixed equipment” in the last two months of 2023.
According to the minister farmers are “not obliged to register for VAT” but can participate in the Flat-Rate Farmer’s Scheme.
This scheme is designed to reduce the administrative burden for farmers by allowing unregistered farmers to be compensated “on an overall basis for VAT on inputs”.
In response to a question raised in the Dáil by the Fine Gael TD for Wexford, Paul Kehoe, Minister McGrath said that “unlike VAT registered businesses, unregistered farmers are not entitled to a deduction for VAT incurred on individual inputs used in their farming business”.
However he also highlighted that flat rate farmers can claim a refund of VAT on items bought for particular inputs including:
- The construction, extension, alteration or reconstruction of farm buildings or structures;
- The fencing, draining and reclamation of farmland;
- The construction or installation of qualifying equipment for micro-generation of electricity for use in a farm business.
But Minister McGrath has warned that farmers cannot claim refunds on other purchases such as “fixed equipment”.
However he added: “Where the installation of fixed equipment requires the construction, reconstruction, or alteration of a farm building, the corresponding VAT incurred has been allowed in certain circumstances.
“Each repayment claim is assessed on its own merits”.
Minister McGrath also provided details to Deputy Kehoe of the total number of claims rejected in November and December 2023 by Revenue.
According to the Minister for Finance a claim may be fully rejected by Revenue for numerous reasons including;
- That it is outside of the 4-year claim period;
- Invoices submitted relate to items which do not qualify under the order;
- Claimant has another trade and is above the threshold for VAT registration;
- Incorrect supplier tax number was provided.