By Gordon Deegan

A dairy farmer has lost out in a VAT battle with the Revenue Commissioners in relation to what the farmer claimed to be purchases for ancillary equipment for a robotic milking machine.

This follows the Tax Appeals Commission (TAC) ruling on a refusal by the Revenue Commissioners in January 2025 to refund the dairy farmer €4,970 in VAT from items bought in conjunction with his robotic milking machine stands.

The farmer sought VAT repayments on collar weights, controller, collars, HR LDN tags, and slide tags which he says he purchased in conjunction with an Astronaut A5 robotic milking machine.

VAT

The flat-rate farmer told the TAC: “This is a complete new build and the robotic milkers are new. The milkers cannot function without the collars, they are an essential part of the whole robotic system.”

In a submission, the farmer stated that the robotic milking machine would not work without the cow collars. 

He said as a consequence of this, his claim in relation to the items in issue, should be allowed in circumstances where the VAT incurred on the purchase and installation of the robotic milking machine had been refunded to him.

The farmer is not registered for VAT but was claiming the VAT back on foot a Government 2021 Refund Order which allows flat-rate farmers who incur VAT on specific kinds of expenditure may claim the repayment of that VAT.

However, the TAC has sided with Revenue and this is the third ruling in recent months where the TAC has ruled against farmers concerning their VAT claims on milking equipment.

Counsel for the Revenue contended that it was clear that the VAT incurred by the farmer in respect of the items in issue was unrelated to the construction, extension, alteration or reconstruction of a farm building or structure.

The Revenue barrister stated that the outlay in question related to items of equipment for the appellant’s cattle.

Robotic milking machine

In his determination, Appeals Commissioner, Conor O’Higgins found that the items in issue, constituting in combination a digital cow collar, were not part of a single composite supply also involving the robotic milking machine.

The Appeals Commissioner stated that this was because they were not - as asserted by the supplier in correspondence furnished in support of the Appellant’s appeal - “neither physically nor economically separable from the overall supply”.

He also outlined that the items in issue were part of a“multiple supply” involving different “individual supplies” made at the same time.

He said the connection that the Appellant had sought to make between the items in issue and claimed outlay on construction - the VAT on which was refunded by the Revenue Commissioners - cannot be established.

The Appeals Commissioner ruled that the farmer's appeal failed on this basis and Revenue’s determination stands.