VAT Registration for Farming

ihatewinter

Hi everyone, would it be worthwhile for me to become VAT Registered, as I plan to increase sheep numbers and basically reclaim land and do up sheds and fences. I'm a part-time farmer with about 140 ewes and this is my first year, that I legally need to fill out tax forms.

Thanks

Farmer Pudsey

ihatewinter wrote: »

Hi everyone, would it be worthwhile for me to become VAT Registered, as I plan to increase sheep numbers and basically reclaim land and do up sheds and fences. I'm a part-time farmer with about 140 ewes and this is my first year, that I legally need to fill out tax forms.

Thanks

On all of the above you can claim back VAT as an unregistered Vat farmers.

lakill Farm

Farmer Pudsey wrote: »

On all of the above you can claim back VAT as an unregistered Vat farmers.

except the price of the sheep

Depends if your going to buy machinery with vat invoices. ie a quad or jeep or tractor

foxylock

lakill Farm wrote: »

except the price of the sheep

Depends if your going to buy machinery with vat invoices. ie a quad or jeep or tractor

I'm an unregistered for vat farmer,did alot of fencing etc last couple of years and claimed vat. Next year I intend to buy a quad and a few bits to go with it max spend 15000. The following year probably a jeep and trailer spending about the same money again, should i now register for vat , what would the advantages and disadvantages be??

ganmo

foxylock wrote: »

I'm an unregistered for vat farmer,did alot of fencing etc last couple of years and claimed vat. Next year I intend to buy a quad and a few bits to go with it max spend 15000. The following year probably a jeep and trailer spending about the same money again, should i now register for vat , what would the advantages and disadvantages be??

Disadvantages...paperwork
Advantages reclaiming vat money on everything from phone bills to diesel

Farmer Pudsey

ganmo wrote: »

Disadvantages...paperwork
Advantages reclaiming vat money on everything from phone bills to diesel

It is more than that you also lose the vat rebate on produce sold such as milk meat or grain. This is 5.25% flat across sales. If you sold 50 cattle at 1100 euro each grossing 55K the vat rebate is nearly 2900. You would not get this paid on your cattle.

atlantic mist

more suited to contract work or tillage where large proportion of inputs/expenses
have the high rate of vat, wouldnt think it would be of much benefit to stock businesses as they get the additional flat rate of 5% increase on receipts and majority of inputs at the 0% vat rate e.g feed and fert while claiming vat back on capital expenditure items

ganmo

13.5% vat on contractor fees
Just look at where you spent your money in your accounts
Animal feed no vat
Services( contractors accountants servicemen) 13.5
Most purchases 23%

This http://www.revenue.ie/en/tax/vat/leaflets/agricultural-services.html
And this http://www.revenue.ie/en/tax/vat/rates/current-historic-rates-vat.html

foxylock

Plenty food for thought there.thanks guys. Just have sheep here no cattle.

Farmer Pudsey

ganmo wrote: »

13.5% vat on contractor fees
Just look at where you spent your money in your accounts
Animal feed no vat
Services( contractors accountants servicemen) 13.5
Most purchases 23%

This http://www.revenue.ie/en/tax/vat/leaflets/agricultural-services.html
And this http://www.revenue.ie/en/tax/vat/rates/current-historic-rates-vat.html

Yes 13.5% on contractor charges but on 5K of contractor charges you pay only 600 on vat. Bales plastic 8 rolls at 84 euro each vat content is 125 euro. If you have any amount of sales through a mart or into a processor you would need a vast amount of purchasses to counteract it.

Thing like tractors are once ever 15 years. Even at that unless buying new as lots of farmers are not vat registered it can be hard to come across a tractor with a vat cert. This will often cost extra so eating into vat claim. Same with Jeeps quads etc unless buying new it hard to get a vat receipt unless previous owner's were all vat registered.

Extra accountants costs are an issue as well. Might not be much but you be lucky if it is less than 500 euro. It all adds up you want to be claiming back 3-4K more than your vat rebate ever year to register. To deregister you have to bake back any surplas vat reclaimed for previous 2-3 years I think. The other sting in the tail is that if you are self employed it may force you to vat register that business as well. I know few sole traders that would prefer not to be registered.

ihatewinter

So if I get VAT registered, then I lose out on VAT on sheep sales. Have I got that correct

steelbar

If you get VAT registered you lose out on the 5% top up of on livestock sales.

There isn't that much paperwork and the VAT return on ROS is simple once you are registered. The advantage of the additional paper work is that you have your records up to day and makes the year end easier.

The actual registration can take 3/4 weeks, I sent mine in on the 11th Sept and its still pending. You cannot back date the registration and cannot claim for anything retrospectively, so make sure if you have any big purchases planned, you time them correctly.

lefthooker

In your case as a stock farmer with a single enterprise there's no great advantage in registering since a lot of inputs are 0% and most capital investment is reclaimable. Plus you lose out on sales.
You'd need to be contracting or be in a few enterprises and have a good bit of machinery with repair and diesel bills to get the most out of VAT.

Gard1

Generally it isn't in a livestock farmers best interests to register for Vat.
Along with the additional hassle and costs associated with being vat registered, you do lose the top up on stock sales.
Vat registration for is advantageous for some Dairy and Tillage farmers who sell the majority of their products at 0% vat ie milk and grain. They do suffer the vat on sale of calves etc but these are offset from the vat rebates on their inputs.
Fertilisers and feeds are all 0%.
Also important to note that vat registered farmers can only reclaim vat on the portion of the vat for business use.
As previous posters have mentioned vat is reclaimable on new sheds yards fencing reclamation. This is done via a Form vat58. More details re what can and cant be claimed on that form.

Now for the caveat Before registering or sending in any form, always seek your accountants advice as they are familiar with your situation. A 2 minute phone call could save hassle going forward.

[Mod snip]

<Gard1, please don't try to solicit customers on boards.ie>

.Kovu.

MikeSoys

Hi Im not sure on this but..so asking forvadvice...

I am building a slatted shed under TAMS 2..im a part time farmer.

So can i claim back the vat for the shed under tams 2? I have cattle only(mosly finishing cattle some sold back at mart. (No dairy, sheep etc.). I think I just need to fill out the form from revenue and send it off and i should be able to get the vat back?

Thanks

arctictree

Sorry for bringing up an old thread. If I was planning to buy a big item this year (e.g. a new tractor) should I consider registering for VAT so I can claim the VAT back? Is it possible to register for VAT, do your return and then deregister?