A new guidance document published by Revenue today (Tuesday, June 4) which sets out the items that unregistered farmers can claim VAT on “does not go far enough,” according to the Irish Creamery Milk Suppliers’ Association (ICMSA).
The new guidance comes after months of uncertainty over the issue of certain VAT refunds and criticism from members of the Joint Oireachtas Committee on Agriculture on what they described as Revenue’s interpretation of the VAT refund order in recent months.
In the new document published today Revenue outlined that “mobile or moveable farm equipment and machinery are not allowed under the order” in relation to VAT refunds.
This means that farming equipment not covered by the Flat-Rate Farmers Refund Order includes automatic calf feeders, cow mats – not fixed – robotic scrapers and slurry bags.
Denis Drennan, ICMSA president, said today while the guidance document provided “clarity” on a number of issues, it did not go far enough.
He also described it as “hugely disappointing that a number of critical items remain non-VAT refundable”.
Revenue
Drennan said in particular that it was ” very hard to understand why automatic calf feeders and robotic scrapers are not eligible for a VAT refund”.
The ICMSA president said in his opinion “these are permanent structures bolted to the ground and the Revenue deem them ineligible while other items which are mobile can be claimed by other sectors”.
He added: “There is a serious contradiction in Revenue’s approach where some items that are fixed are ineligible while other mobile items can be reclaimed.
“Calf feeders and robotic scrapers are two pieces of modern equipment to improve labour efficiency and animal welfare and it is very disappointing that they remain ineligible.”
Revenue has outlined that the VAT Refund Order for flat-rate farmers dictates that refunds for VAT can only be claimed in relation to:
- The construction, extension, alteration or reconstruction of farm buildings or structures;
- The fencing, draining or reclamation of farmland;
- The construction, erection or installation of qualifying equipment for the micro-generation of electricity for use mainly in the farm business.
However Drennan said that the latest guidance from Revenue will continue to leave farmers’ with a degree of uncertainty.
“While it is clear that where the installation of a bulk tank requires construction of alteration of a building, the VAT is reclaimable, a level of uncertainty remains for farmers who are making a very significant investment in a bulk tank and the Revenue should be clearer of what is required to ensure the VAT can be reclaimed on a new bulk tank.
“The reclaiming of VAT on a bulk tank can be the deciding factor on whether the farmer makes the investment or not and given this, the Revenue should remove this uncertainty by providing clearer guidance,” he urged.
The ICMSA president also said that further clarification is needed in relation to meal bins and bulk milk tanks.