Cllr Sarah O’Reilly (Aontú).

Vat Rebate Scheme changes ‘a kick in the teeth’ to farmers

Issues around the VAT Refund Scheme for farmers were highlighted during this week’s meeting of Cavan County Council.

In her notice of motion on the matter, Cllr Sarah O’Reilly (Aontu) called on the Minister for Expenditure and Revenue to clarify what farm equipment is eligible for VAT refund under the current ‘interpretation of the law’ for farmers.

She also asked the Government to amend the statutory instrument to remedy and include previously allowable equipment.

“The Government has sucker punched farmers with this new VAT rebate debacle,” she told those gathered. “A new interpretation by Revenue of the VAT Refund Scheme has left many farmers really angry, bewildered and confused.

“I am being contacted on a daily basis by farmers who have been refused VAT refunds on items of equipment - most notably bulk milk tanks and automatic scrapers. Up until recently, these items were allowable for VAT reclaim.”

Cllr O’Reilly went on to say that previously eligible fixed machinery items including calf feeders, automatic scrapers and bulk milk tanks are now excluded from the scheme. “Revenue insists there is no change to its policy, however it’s quite clear from the practical experience of farmers that the policy has changed,” continued Cllr O’Reilly.

“In recent months a decision was made to change the VAT Refund Scheme for non-registered farmers but nobody told them. This decision has pulled the rug out from under farmer’s feet, leaving their very carefully calculated budgets and loan repayments in bits. It also creates a vulnerability, distrust and unease within the farming community and with machinery suppliers who are operating in every corner of the country.”

Cllr Winston Bennett (FG) then pointed to how farmers previously knew exactly what they could get VAT back on. He said what has happened has come “as a real shock” to them.

“Calf feeders are not being bought now because farmers can’t get the VAT back on them and they feel like they have been kicked in the teeth,” he continued.

“This is happening all over the country and many farmers are in limbo because they are not spending money owing to the fact that they fear they won’t get the VAT rebate on the purchase.”