We’re not VAT-registered, but spent a lot of money this year upgrading the farm with new concrete roadways, fencing, and some yard improvements.

A neighbour mentioned that even though we’re not registered for VAT, we might still be able to claim some of it back through a refund scheme. I’ve never done that before and don’t want to go to the trouble if it’s not worth it. Can farmers really reclaim VAT without being registered? If so, what kind of expenses qualify, and how do you go about making a claim?

ANSWER: You’re right to ask – many farmers miss out on VAT refunds they’re legitimately entitled to. Even if you’re not VAT-registered, you can often reclaim VAT on certain farm capital expenses through the VAT 58 refund system. It’s one of the most valuable reliefs available to unregistered farmers, and it can return thousands of euro, provided you follow the rules.

Who can claim?

VAT 58 refunds are designed for flat-rate or unregistered farmers, meaning those who don’t charge or reclaim VAT in their normal trading. You can claim VAT back on specific capital investments that create or improve fixed structures on your farm.

That means new buildings, concrete yards, silage slabs, fencing, or farm roadways generally qualify, but only if they are permanent and directly related to your farming activity. Routine expenses such as diesel, feed, or day-to-day maintenance don’t qualify under this scheme.

So what counts as qualifying work? The key test is permanence. Revenue allows claims for fixed assets that form part of the farm infrastructure; things that will remain in place for years. Typical examples include:

However, temporary or moveable items such as portable fencing, machinery, or tools don’t qualify. Nor can you claim for professional fees or grant-funded portions of projects.

How the refund works: if you paid VAT on qualifying works, you can submit a VAT 58 form to Revenue after completion.

The form is available online through Revenue’s MyAccount or ROS system. You’ll need:

Once submitted, Revenue reviews the claim and, if approved, refunds the VAT directly to your account. The process can take several weeks, especially if documentation needs clarification.

The four-year rule: you can claim VAT on eligible expenses within four years of the end of the taxable period in which the cost was incurred. So, if you poured concrete in April 2021, you have until December 2025 to make the claim. After that, the window closes.

It’s wise not to wait until the deadline. Submitting soon after work is completed helps because if Revenue raises queries, it’s easier to locate invoices and contractors while details are still fresh.

Common pitfalls: several issues commonly delay or reduce refunds:

If Revenue isn’t satisfied that the works are permanent or agricultural, they can reduce or refuse the refund. Keep photographs, drawings, and planning approvals as these can strengthen your claim, if queried.

Why some farmers register instead: for very large or frequent capital projects, some farmers consider registering for VAT instead of using VAT 58. Registration allows you to reclaim VAT on all inputs but requires you to charge VAT on outputs (like livestock or produce sales).

For most standard family farms, that extra administration outweighs the benefit, which is why the VAT 58 refund system remains the preferred option for one-off or occasional works.

Practical tips before you start: keep a folder for all capital invoices and mark clearly which relate to permanent structures. Make sure contractors issue proper VAT invoices, not just delivery dockets or estimates. Your accountant can review them before submission to confirm eligibility. When claiming online, check that the claim covers only your farm’s improvements, not domestic or private works.

Marty Murphy is head of tax at ifac, the professional services firm for farming, food and agribusiness.