Progressive Genetics has informed farmers that milk recording prices are to increase by 9% effective from 1 April 2021 due to a higher VAT rate.
In a letter to farmers, Progressive Genetics said the Revenue Commissioners had increased the rate at which milk recording is charged from 4.5% to 13.5%.
Milk recording companies have been availing of a VAT concession since 1993. The concession allowed for milk recording to be charged at a reduced rate of a third of the service rate.
According to the Progressive Genetics letter, Revenue instructed companies in January 2020 that the concession was no longer available and the full 13.5% VAT rate should be applied.
“The milk recording organisations did make representations and submission to Revenue arguing for the retention of the concession, but these proved unsuccessful,” the letter says.
Revenue instructed that the effective VAT rate of 13.5% was to be applied and backdated to 1 January 2020.
“The Progressive Genetics Board took the decision to absorb the VAT increase in its entirety for 2020 but this is not a sustainable option for the company and the VAT increase will apply from 1 April 2021.”