Farmers will be disappointed to hear that a VAT exemption on low emission slurry spreading (LESS) equipment will not be introduced, independent TD Carol Nolan has said.

Nolan said that farmers have communicated to her that they are frustrated with the lack of action Ireland can take on such matters without permission under an EU Directive.

She asked the Minister for Finance in the Dáil “if he would support the introduction of a VAT exemption on low emission slurry spreading equipment purchased by farmers” and asked if he would make a statement on the matter.

Responding, Minster Donohoe said that the rate of VAT on Irish goods is subject to EU VAT law, which does now allow discretion for a reduction on certain goods.

“In accordance with Irish legislation, agricultural equipment is liable to VAT at the standard rate, currently 23%. There is no discretion under the Directive for Ireland to reduce the rate of VAT on these goods.”

However, the minister added that farmers who are registered, can claim back VAT that was charged on costs relating to their business, this includes the purchase of agricultural machinery such as LESS equipment.

Those that are not in a position to claim VAT back in this way can avail of the Flat Rate Farmers’ Scheme said Minister Donohoe. Under this, farmers can charge an additional flat rate cost when supplying their goods and services, to compensate for VAT that they have paid in the course of their agricultural enterprise.

Deputy Nolan acknowledged that these schemes are helpful for farmers, but commented that there is still discontent among the agricultural community. She said “I do accept that there are beneficial arrangements that can be entered into to offset the challenges presented by the VAT issues that arise.

“Having said that, the clear sense I am getting from farmers is one of genuine frustration at the fact that Ireland does not appear able to sneeze unless it is permitted to do so in an EU Directive of one kind or another,” Nolan finished.

Low emission slurry spreading

The latest report from the Food Vision Dairy Group last week (May 13), recommended increased adoption of low emission slurry spreading in Ireland.

It set a target of 100% adoption of the technique for all dairy cow organic manure by 2025.

The group, which was established at the end of January, is tasked with examining ways for the dairy sector to help achieve agricultural and land use targets in the Climate Action Plan 2021. Its report will now be sent to Minister for Agriculture, Food and the Marine Charlie McConalogue before the group meets again later this month.