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Registering for VAT, Young Farmer Start Up

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  • 20-09-2020 12:56pm
    #1
    Pistolpete1
    Registered Users Posts: 53 ✭✭


    Hey
    Just looking for some basic advice or direction before I start farming. I have 60 acres of land and going to set up a small part time beef farm within the next year or so. I have a could source for all beef stock lined up already but i don't have any machinery/tractor and would be interested in buying machinery/tractor which would last 20 years+.

    If I was to purchase some machinery (second hand)for example, tractor, conditioner mower, slurry tanker and agitator, would it be advisable to register for vat or not? Farm would compromise of ~15 beef stock at first from weanlings purchase.

    Trying to find my feet at the moment so any advise appreciated.


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    #2
    yosemitesam1
    Registered Users Posts: 2,946 ✭✭✭yosemitesam1


    Pistolpete1 wrote: »
    Hey
    Just looking for some basic advice or direction before I start farming. I have 60 acres of land and going to set up a small part time beef farm within the next year or so. I have a could source for all beef stock lined up already but i don't have any machinery/tractor and would be interested in buying machinery/tractor which would last 20 years+.

    If I was to purchase some machinery (second hand)for example, tractor, conditioner mower, slurry tanker and agitator, would it be advisable to register for vat or not? Farm would compromise of ~15 beef stock at first from weanlings purchase.

    Trying to find my feet at the moment so any advise appreciated.

    Whether or not you can reclaim the vat on 2nd machinery depends on whether or not the original buyer was.
    You'd probably be fairly limited in your buying options and you'd lose 5.2% off of all your sales no matter if it was mart/factory etc


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    #3
    Sacrolyte
    Registered Users Posts: 851 ✭✭✭Sacrolyte


    I’ve no idea to be honest but I’m dying to find out what happened in that clamping story.


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    #4
    whelan2
    Registered Users Posts: 29,153 ✭✭✭✭whelan2


    What's the story with marts deducting and adding vat back on on their dockets?


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    #5
    Omallep2
    Registered Users Posts: 179 ✭✭Omallep2


    How would it work if you registered for vat, take the pros on machinery purchase, loss on sales and then say after a year or 2 with all purchases done revert to paying vat as you go?


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    #6
    yosemitesam1
    Registered Users Posts: 2,946 ✭✭✭yosemitesam1


    Omallep2 wrote: »
    How would it work if you registered for vat, take the pros on machinery purchase, loss on sales and then say after a year or 2 with all purchases done revert to paying vat as you go?

    Revenue don't let you out of it that easy, could have to pay back previously claimed vat


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    #7
    ganmo
    Registered Users Posts: 7,748 ✭✭✭ganmo


    Registering for vat as a full time farmer isn't worth your while.
    Losing 5% of all your sales every year to just get 23% or 13.5 back on a few purchases.
    Food feed and fertiliser would be the majority of your Bill's are 0%
    Diesel and contractor rate is 13.5 but some contractors may not be registered.


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    #8
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    ganmo wrote: »
    Registering for vat as a full time farmer isn't worth your while.
    Losing 5% of all your sales every year to just get 23% or 13.5 back on a few purchases.
    Food feed and fertiliser would be the majority of your Bill's are 0%
    Diesel and contractor rate is 13.5 but some contractors may not be registered.

    I know at least two part-time beef farmers registered and they would be very much saying it’s the way to go. Claiming vat back on all diesel (including the wife’s car), vat back in all servicing and repairs, vat back in buying crew cab (major saving), vat back on buying tractors and other machinery (major saving), vat back on contractors, vat back in vet etc etc and that leaving out bits and pieces here and there unrelated to the farm that you would get away with.

    It depends of course but some lads pay a lot of vat and there would definitely be savings in registering.


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    #9
    Water John
    Registered Users Posts: 21,144 ✭✭✭✭Water John


    Balance the adv and dis adv.
    Adv
    VAT back on machinery and some costs.

    Dis adv.
    Loose flat VAT on stock sales.
    VAT refund already available on buildings, fixtures and fittings.
    Need to make accurate returns every two months.


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    #10
    J.O. Farmer
    Registered Users Posts: 2,433 ✭✭✭J.O. Farmer


    Axton Enough Scorpion wrote: »
    I know at least two part-time beef farmers registered and they would be very much saying it’s the way to go. Claiming vat back on all diesel (including the wife’s car), vat back in all servicing and repairs, vat back in buying crew cab (major saving), vat back on buying tractors and other machinery (major saving), vat back on contractors, vat back in vet etc etc and that leaving out bits and pieces here and there unrelated to the farm that you would get away with.

    It depends of course but some lads pay a lot of vat and there would definitely be savings in registering.

    Best of luck to them if it's working for them but how much machinery would a part time beef farmer buy in a year.

    In any case all of those costs except for the machinery are costs which can be deducted before tax.

    If you take it they're buying a lot of machinery they must be on the top rate of tax. If they weren't registered for Vat then they'd save 50% of what they're reclaiming on reduced income tax.

    The 23% vat becomes 11.5% and 13.5% becomes 6.25%, lose 5% on sales and make vat returns they're either turning over a lot of cattle, have another business or aren't saving as much as they think.


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