Revenue has told Agriland it is “engaging proactively” with farming organisations in relation to the Flat Rate Farmers’ Scheme and has “invited” further submissions from the farming sector on the issue of VAT refunds.
Officials from the Department of Finance have held meetings with both the Irish Creamery Milk Suppliers’ Association (ICMSA) and the Irish Farmers’ Association (IFA) to discuss its current approach to VAT refunds for unregistered farmers.
Revenue maintains there has been no major change to the legislation and that it has not changed its approach to the refund order.
However political and farming leaders have claimed this is not the case and that farmers throughout the country have been refused a VAT refund on items of equipment, including bulk tanks, which they had previously been allowed to claim on.
VAT
The Minister for Finance, Michael McGrath, has previously outlined that farmers who elect to register for VAT are obliged to account for VAT on their supplies and are entitled to claim a deduction based on inputs used for the purposes of their taxable supplies.
“VAT-registered farmers would be entitled to reclaim the VAT incurred on their farming business costs (such as feed bins, milk bulk tanks, automatic calf feeders, and milking parlour equipment, etc), and this should be done through their normal VAT returns,” the minister stated.
But farmers can also remain unregistered for VAT purposes, and opt for the Flat Rate Farmers’ Scheme.
According to Revenue, these farmers are unable to claim refunds when they purchase feed bins, milk bulk tanks, automatic calf feeders or milking parlour equipment.
But it is also understood that where the installation of certain equipment – including some of the items listed above – requires the alteration or reconstruction of a farm building or structure, the corresponding outlay has been allowed in certain circumstances.
“Each claim is assessed on its own merits. Claims that do not meet the conditions of the refund order cannot qualify for a refund of the VAT,” Minister McGrath stated.
Revenue
A spokesperson for Revenue told Agriland that both the IFA and ICMSA have raised the issue of VAT refunds on meal bins, calf feeders, milk tanks, certain cubicle/slat mats, water systems and matters related to multi-year farming construction projects.
“Revenue is engaging proactively with both representative bodies and is considering these items with a view to finalising the updated guidance,” the spokesperson added.
It has also indicated that it intends to publish updated guidance in May.
Separately Minister McGrath said the current timeframe for claims for refunds under the Flat Rate Farmers’ Scheme is running at under three weeks.
The minister said: “This timeline reflects a significant reduction in wait times which were running at six weeks in January, February and March of this year.”