farmers being vat registered

Greengrass1

Any benefit?

micraX

You can claim bay back so I'd say yeah, thats a benefit.

frazzledhome

Greengrass1 wrote: »

Any benefit?

If most if your inputs are +vat, that is spray, fuel and machines and your Sfp is the biggest part of your income I'd consider it.

As a dairy farmer where there's no vat on feed or fert and you get paid vat in your milk I think it'd be nuts. Many did it as a quick fix to buy a jeep or a tractor to later regret it.

Look at your milk statement and see could you do without the vat element and remember that you'll pay vat in every animal you sell

mauser77

What % is vat on animals sold

Lambofdave

mauser77 wrote: »

What % is vat on animals sold

http://www.revenue.ie/en/tax/vat/rates/decision-detail-00067.jsp

http://www.revenue.ie/en/tax/vat/rates/current-historic-rates-vat.html

sheebadog

Tillage benefits from being vat registered. If you're in milk as number one income stay away.
Saying that I farm as a company and I've milk, but milk isn't main income.

frazzledhome

sheebadog wrote: »

Tillage benefits from being vat registered. If you're in milk as number one income stay away.
Saying that I farm as a company and I've milk, but milk isn't main income.

You don't need to be Vat reg to incorporate

sheebadog

frazzledhome wrote: »

You don't need to be Vat reg to incorporate

I thought that once you turn over more than €500k that you have to register.

maxxuumman

sheebadog wrote: »

I thought that once you turn over more than €500k that you have to register.

No, you can argue that the vat value of the turn over is too low because the majority is at the agri rate.

Farmer Pudsey

Greengrass1 wrote: »

Any benefit?

farmers get a vat rebate of 5% on sales. In the case of milk this is equivlent to 4.8% of total price. So if selling 100K worth of milk you would lose 4.8K if vat registered.

Alot of farm input are vat rated at 0% ( feedstuffs and fertlizer) You can claim back vat on fixed equipment and buildings (meal bin, fencing etc.)

If you VAt register you can claim back vat on machinery, vet and professional fees, and partially on car and diesel. However if you VAT register accountancy costs go up as more detailed accounts are required and you need all reciepts cheque stub not acceptable.

If we count extra account fees at 1K in the above case you would need over 6K/year every to have any benifit from vat registering. Most buisness I know pay moe vat than they claim back.

For in the above situtation

frazzledhome

If you are selling goods for >75k you are oblidged to reg

If sales of services >37.5k you are oblidged to reg

However those rules do not apply to farmers. We in fact have an exemption as farmers hence the vat payment of c5% on milk and stock sales

dzer2

You will have a lot of VAT to claim back with wrapping your own silage and running all that machinery and plastic also all your cleaning chemicals, vets bills, repairs and diesel. Just get your last yrs accounts and run over the purchases see what vat you paid and then check against your milk statement you will know then. Also you need to tell factories and Marts that you are vat registered as they will then not pay you vat on cattle. As for extra cost for accountant they should not be given the time of day do it your self and have accounts at where you buy your gear even if you pay cash get it put on the account that way you only need 12 statements from them to include in your accounts and quality audits. Any questions about receipts then you can look for the docket from them.

Farmer Pudsey

dzer2 wrote: »

You will have a lot of VAT to claim back with wrapping your own silage and running all that machinery and plastic also all your cleaning chemicals, vets bills, repairs and diesel. Just get your last yrs accounts and run over the purchases see what vat you paid and then check against your milk statement you will know then. Also you need to tell factories and Marts that you are vat registered as they will then not pay you vat on cattle. As for extra cost for accountant they should not be given the time of day do it your self and have accounts at where you buy your gear even if you pay cash get it put on the account that way you only need 12 statements from them to include in your accounts and quality audits. Any questions about receipts then you can look for the docket from them.

If you vat register you need much more detailed accounts. All very well to say do it your self but in reality will you have the time. VAT returns generally have to be done monthly at the start, you may get a away with ever 3 months but that is it. If not filed then you are not compliant. If not compliant it will effect any grants or other government related payments. have you to be tax compliant to get commercial tax on a van/jeep if taxing for first time.

Some of you purchasses will be one off especiall if you shop around I find that if I have an account and am in and out of the one place all the time prices are dearer than if I go in with cheque book in hand. If VAT registering I allow an extra 1K for accounts. A lot of farm vat is services relatedso 13.5% that works 119 euro/1K to claim , at the higher rate it is 187/1K. At a 66-33 split you would need about 45K in vat related spending to recover 6K/year.

And that is for 100K in milk sales equivlent to about 300K litres at 33c/litre.

larrymiller

Bit off topic but can some one tell me what I can claim vat back for if I'm not registered, eg fencing (I think)

frazzledhome

larrymiller wrote: »

Bit off topic but can some one tell me what I can claim vat back for if I'm not registered, eg fencing (I think)

All fixed equipment ie sheds, fencing meal bin cubicles etc

Farmer Pudsey

frazzledhome wrote: »

All fixed equipment ie sheds, fencing meal bin cubicles etc

Also land reclaimation/drainage, hedging, watertroughs etc

larrymiller

Farmer Pudsey wrote: »

Also land reclaimation/drainage, hedging, watertroughs etc

If I was repairing sheds would that count?
How do you go about it?

frazzledhome

larrymiller wrote: »

If I was repairing sheds would that count?
How do you go about it?

Repairs aren't reclaim able but new gates or new sheeting is, get it invoiced properly.
A new wash down pump on a parlour is unless its replacing an existing one, if you get my drift. I think the less posted on Boards the better

dzer2

Farmer Pudsey wrote: »

If you vat register you need much more detailed accounts. All very well to say do it your self but in reality will you have the time. VAT returns generally have to be done monthly at the start, you may get a away with ever 3 months but that is it. If not filed then you are not compliant. If not compliant it will effect any grants or other government related payments. have you to be tax compliant to get commercial tax on a van/jeep if taxing for first time.

Some of you purchasses will be one off especiall if you shop around I find that if I have an account and am in and out of the one place all the time prices are dearer than if I go in with cheque book in hand. If VAT registering I allow an extra 1K for accounts. A lot of farm vat is services relatedso 13.5% that works 119 euro/1K to claim , at the higher rate it is 187/1K. At a 66-33 split you would need about 45K in vat related spending to recover 6K/year.

And that is for 100K in milk sales equivlent to about 300K litres at 33c/litre.

I am VAT registered and do my own accounts I have a small accounts package (popular one) file on line every 4 months and file end of yr online as well. I have past 2 audits and never have had a problem. Lots of lads can spend hours on boards and the likes but never use the computer time to do accounts.
Farmers can make out in the worst conditions and achieve some outstanding results but cant do their own accounts. Its simple enough and if you get a handle on your accounts you will definitely get a handle on your finances

epfff

dzer2 wrote: »

I am VAT registered and do my own accounts I have a small accounts package (popular one) file on line every 4 months and file end of yr online as well. I have past 2 audits and never have had a problem. Lots of lads can spend hours on boards and the likes but never use the computer time to do accounts.
Farmers can make out in the worst conditions and achieve some outstanding results but cant do their own accounts. Its simple enough and if you get a handle on your accounts you will definitely get a handle on your finances

I am in the same boat
I keep on top of it every second month
Also great for watching expenses

Red Sheds

Its not so hard to do a vat return if you keep all your invoices. I have made this spreadsheet attached thats easy to use and calculates automatically you VAT on sales and purchases ready to put into your VAT return on ROS. It also tells you if its a refund or payable. All you need to enter is the

Date on Invoice
Name of Supplier
Total amount of the Invoice Including the VAT
The Vat rate or % on the invoice

Do the same thing for your sales on the Sales section of the sheet and the summary figures for your return are then given in the section under where you entered sales. I have given it to many small business that dont have alot of transactions and they find it great for doing their VAT.

On the question of registration, its a case by case basis for each farm. Dont forget you are entitled to claim back VAT on capital purchases of buildings, reclaaimation, fencing anyway.