Members of the Joint Oireachtas Committee on Agriculture have clashed with Revenue officials over VAT refunds to unregistered farmers.
Representatives from the Office of the Revenue Commissioners appeared before the committee following months of concerns from farmers who were refused refunds on VAT items which previously qualified.
The officials maintained that Revenue’s interpretation of the VAT refund order has not changed.
Committee
Cathaoirleach of the committee Deputy Jackie Cahill placed on the official Oireachtas record that he was “disappointed” with the answers given by the Revenue representatives.
“It’s crystal clear to us as politicians that the policy of the Revenue changed. You’ve categorically denied that that happened. You’re perfectly entitled to do that,” he said.
“Calf feeders were refundable without any question up to August of last year and now calf feeders are being refused. That’s simple facts and that has to be a change in interpretation,” he added.
Deputy Cahill welcomed that Revenue was engaging with farming organisations and that further clarity will be offered on the matter.
However, the Fianna Fáil TD said the committee were unhappy that the officials refused to accept there was a change in Revenue’s interpretation.
Members of the committee reported receiving “numerous calls” from farmers in recent months on the issue.
“The amount of representations I have got on the VAT refund is very significant. Previously, I could count on one hand the number of representations I got on it,” Deputy Cahill said.
Meal bins
Fine Gael Senator Tim Lombard took exception to Revenue’s stance that the VAT refund order in place since 1972 had not recently changed.
“You say that the Revenue has not changed its interpretation of the law of this refund order. That is a very bold statement to make,” he said.
The Cork senator said that he secured a VAT refund from Revenue for a 3.5t meal bin on his farm in 2002.
“Today, I would not get that done on the interpretation that is put before the Oireachtas that a 10t meal bin would only qualify. So is that a different interpretation or was I wrong in 2002?” he asked.
Independent Ireland TD Michael Fitzmaurice claimed that Revenue restricting VAT refunds to meal bins over 10t discriminated against small farmers.
“Let’s not keep denying that there is a change because if there wasn’t a change the farming organisations or you wouldn’t be in here. We never had to have you in before this,” he said.
Fine Gael Senator Tim Lombard said that this is issue is causing “paralysis” in the industry currently as farmers are unsure of what they can claim a VAT refund on.
Senator Denis O’Donovan added that the committee was “splitting hairs” in relation to Revenue’s interpretation of the order, particularly when it comes to milk tanks and meal bins.
“It seems to be get the farmer at all cost,” the Fianna Fáil representative said.
Revenue
Chad Egan, principal officer with the Office of the Revenue Commissioners, told the committee that he was “very happy to stand over that there has been no change in interpretation”.
“I don’t believe there has been any change. I’m responsible for interpreting the refund order and I would know. I would have issued an instruction that would have been published if there was any such change.
“From our statistics generated, 96% of claims have been approved with the last three years, our approval rate has been quite consistent. Our rejection rate has been quite consistent as well,” he said.
“Part of what we are trying to do is bring greater clarity to what we allow under the order,” he added.
Egan said that he was happy that Revenue had been consistent in its approach on the matter.
He explained that in order to qualify for a VAT refund a larger farm item must be considered a structure, while smaller items must be classified as a fixture.
He said that concerns raised by farming organisation will be taken into consideration as part of the process of Revenue reviewing and updating its guidance.
Revenue said that it would issue guidance to provide clarity to the farming sector on its website in “the coming weeks”.
Last year, there were over 37,000 claims for VAT refunds from farmers, with €88 million paid out by Revenue.
The committee was told that the processing of refunds takes between two and six weeks depending on the level of claims being lodged by farmers.
Revenue also reassured farmers that it would not be reviewing past refunds that had been issued.
The committee appealed to Revenue to review its stance on VAT refunds, particularly in relation to slurry bags, calf feeders, robotic scrapers and meal bins.