The majority of Irish farmers are losing out on VAT rebates at present, as the flat rate payment for unregistered farmers is not covering the VAT they are paying on their inputs.

The unregistered Farmers Flat Rate payment is set annually by the Revenue, using data supplied by the Central Statistics Office (CSO). The intention is to ensure that VAT receipts are budget neutral for farms operating as sole trader entities. As these farms cannot claim back VAT paid, something all incorporated businesses do, a rebate is paid on all farm sales.

The majority of farmers are not registered for VAT, and avail of this facility.

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In Budget 2026, the rebate rate was reduced sharply, from 5.1% to 4.5%. Since then, milk and beef prices have fallen back, while input costs are surging.

The IFA has been calling for an urgent review of the rate in the light of the recent huge divergence in input costs and farm gate prices. “Milk and beef prices way back on last year, and all costs rising due to the surge in fuel and energy costs,” explains Bill O’Keeffe, the IFA farm business chair.

“As a result, unregistered farmers are losing out fairly heavily, as the rebate rate is not covering VAT payments from their business.”

In a recent interview with the Irish Farmers Journal, Minister for Agriculture Martin Heydon poured cold water on any prospect of a review. “There’s no intention to have an intervention like that right now,” the Minister said.

“The reason the unregistered farmer rebate is reviewed once a year is as a part of the Finance Act coming out of the Budget,” he explained.

“There’s no mini-budget here, we’re doing these interventions here right now [the fuel support scheme] within budget parameters,” he said.

Unregistered farmers can also claim back VAT paid on fixed farm investments, including fencing, farm roadways and farmyard development. In 2025, €66m was claimed back by 27,000 farmers in this manner.