Milk Quality Ireland has called on the Government to restore the VAT refund for essential farm infrastructure.

This comes on the back of recent changes to the flat rate VAT scheme, which allowed unregistered farmers to reclaim VAT on certain expenditure on farm investments.

Acting as the cross-sector collaborative body for the dairy industry, Milk Quality Ireland includes ICOS, Teagasc, dairy co-operatives, milking machine manufacturers and milking machine technicians.

According to chair of Milk Quality Ireland and board member of ICOS Vivian Buttimer, the provision of a VAT refund on expenditure incurred on the erection of farm buildings and structures, including fixed plant items, supports the ongoing modernisation and improvement of dairy farm facilities.

These essential investments, he said, translate into broader improvements in milk quality, animal welfare, sustainability and labour efficiency outcomes.

“The change in interpretation by Revenue is greatly concerning for farmers who have made investments in fixed plant items such as milk bulk tanks with the expectation of receiving a VAT refund.

"Furthermore, many farmers will have no choice but to reconsider long-planned investments in their dairy facilities, as the change in VAT treatment will in effect nullify the benefit of grant aid provided by the State under TAMS for these investments," he added.

Letter

Buttimer confirmed that Milk Quality Ireland has written jointly to the Minister for Finance and Minister for Agriculture, stressing the importance of on-farm capital investment to the objectives of milk quality and food safety.

It is vital, he added, that the Government takes the necessary steps needed to reinstate the VAT refund for fixed plant items such as milk bulk tanks, milking parlour equipment, meal bins, automatic calf feeders and automatic scrapers, as these are essential farm infrastructure.