Confusion has arisen over the VAT rate for peat bedding, with many farmers charged 23% instead of 13.5% by companies, including Bord na Móna.
The confusion has stemmed from VAT on peat for horticulture which is charged at 23%, however, Revenue has told the Irish Farmers Journal: “The sale of animal bedding made from peat is liable to the reduced rate of VAT [13.5%].”
Peat bedding has seen a surge in demand given straw shortages this year and the Irish Farmers Journal understands that a number of large peat sellers have been selling peat bedding to farmers at a VAT rate of 23%.
Although the seller does not benefit from the increased rate, the onus is on them to repay the overcharged VAT to the farmer.
“Where a trader charges the incorrect rate of VAT on their supply, they should first issue a credit note for the original invoice and then issue a revised invoice showing the correct VAT,” Revenue stated.
“The recovery of any difference in the price resulting from the VAT change is a matter between the seller and the buyer.”
The confusion is widespread and even Teagasc has based estimates on a 23% VAT rate, calculating that a 27t arctic load of peat costs €1,581.
This would mean that farmers are paying on average €151 more than they should be on a load of a peat bedding.
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