ICOS urges government to fix VAT anomaly affecting non‑registered farmers

The Irish Co‑operative Organisation Society (ICOS) has called on the government to correct a “VAT anomaly” that it says financially penalises non‑VAT‑registered farmers who sell livestock through marts.

ICOS points out that all livestock auctions are conducted on a VAT‑inclusive basis at a rate of 4.8 %, while the flat‑rate addition scheme for non‑registered farmers applies a lower rate of 4.5 %. The 0.3 % difference means that for every €1,000 of livestock sold at a mart, €2.86 is deducted from the farmer’s flat‑rate addition.

Ray Doyle, ICOS livestock and environmental services executive, appeared before the Oireachtas Joint Committee on Agriculture and Food on Wednesday, 23 September, alongside representatives from the Revenue Commissioners and the Department of Finance to discuss the issue.

The flat‑rate addition scheme is intended to compensate non‑registered farmers for VAT incurred on inputs such as fuel. ICOS says the discrepancy arose from a Central Statistics Office‑based calculation introduced in Budget 2026, but the government has not provided the underlying formula.

ICOS argues that any necessary balancing of the VAT system should be spread over time rather than imposing a sharp deduction that disadvantages farmers and marts. It proposes that the flat‑rate addition rate never be set lower than the livestock VAT rate in any year.

The society warns that the current policy is prompting some farmers to trade privately rather than through marts, potentially harming the marts’ competitiveness.

Source: Agriland. Photo: Emadul Islam Akash / Pexels.