The government has been accused of making a ‘pig’s ear’ of the issue of VAT refunds for farm equipment.
Aontú Cllr. Sarah O’Reilly said she is being “inundated with calls by concerned farmers, due to farm equipment being no longer eligible for VAT returns”.
“I am being contacted on a daily basis by farmers who have been refused VAT refunds on items of equipment. A ‘new interpretation’ by Revenue of the VAT refund scheme has left many farmers really angry, bewildered and confused.
“Previously eligible fixed machinery items such as, calf feeders, automatic scrapers and bulk milk tanks are now being excluded from the VAT rebate scheme,” Cllr. Sarah O’Reilly said.
The councillor said that farmers can see for themselves that the policy seems to have changed somewhat in recent months in relation to claiming back VAT.
Revenue previously confirmed to Agriland that computerised or automatic calf feeders are “not refundable” under the VAT refund order.
“The refund order does not, however, provide for relief from VAT suffered on the acquisition of movable goods, such as farm equipment,” Revenue stated.
“The equipment must be permanently installed in the farm building or structure and, once installed, cannot be removed without causing significant damage, or destruction to the farm building or structure or to the equipment itself.
“Each claim is assessed on its own merits, and claims that do not meet the conditions of the refund order cannot qualify for a refund of the VAT,” Revenue added.
Rules for VAT refunds
Meanwhile, Cllr. O’Reilly added: “The rules are being changed around this so often, it’s terribly confusing for farmers.
“This is unfair to farmers who are already to the pin of their collars trying to make a living from the land,” she said.
The Aontú representative added that many farmers have spent large amounts of cash on this equipment, believing they would be compensated for the VAT.
Previously, she said they would have received the VAT refund within three weeks from the date of application.
This decision has left farmers’ budgets and loan repayments “in bits”, along with the distrust and unease within the farming community and the machinery suppliers,” she explained.
Cllr. O’Reilly has called for government intervention to resolve the matter.
“Clarity is vital, people are under enough stress and strain. All farmers want to know is ‘what are the clear ground rules?’ That’s not too much to ask.
“I am putting a motion down for today’s (Monday, February 12) meeting of Cavan County Council calling on the Minister for Expenditure and Revenue for urgent clarification on the issue.”