Serious contradictions remain in Revenue’s position on what investments qualify for VAT rebates, the Irish Creamery Milk Suppliers Association (ICMSA) maintained this week.

The farmer body welcomed the publication of a tax and duty manual by Revenue, which outlines the types of expenditure on which VAT can be reclaimed by farmers, but said that potentially costly anomalies remained in the system.

ICMSA president Denis Drennan questioned how some items that are fixed are ineligible for VAT refunds, while other mobile items can be reclaimed.

“It is very hard to understand why automatic calf feeders and robotic scrapers are not eligible for a VAT refund,” said Drennan.

“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,” he maintained.

More clarity was needed in relation to bulk tanks and particularly what is required to ensure the VAT can be reclaimed on a new bulk tank, Drennan said.

'Absence of clarity'

While the VAT is reclaimable where the installation of a bulk tank requires construction or alteration of a building, Drennan maintained there is an absence of clarity on what exact level of works were required to qualify for the VAT rebate.

“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, Revenue should remove this uncertainty by providing clearer guidance,” the ICMSA leader said.

In relation to meal bins, Drennan called on Revenue to clarify that there was no minimum size to a meal bin bolted to a concrete base in terms of reclaiming VAT.

Revenue previously had a 10t limit in place.

“[The] ICMSA raised this matter with Revenue and we would hope that Revenue [has] dropped the minimum size, but it is not fully clear from the guidance document,” Drennan said.