Government intervention will be required to resolve Revenue's new interpretation of VAT rules on TAMS investments, according to the Irish Creamery Milk Suppliers Association (ICMSA).

The changes have deemed milk bulk tanks, meal bins, automatic calf feeders, slurry scrapers and milk equipment as to be no longer eligible for a VAT reclaim.

“[The] ICMSA welcomes the clarification from Revenue that fixed automatic scrapers and drafting gates remain eligible for the VAT reclaim and it was agreed that [the] ICMSA would supply further information in relation to bulk milk tanks, which are obviously an integral part of the milking unit and thus should be eligible for a VAT reclaim," ICMSA president Denis Drennan said following a meeting with Revenue.

Financial pressures

However, he said that the changes have created huge financial pressures for individual farmers who were expecting to reclaim VAT on purchases, as well as halting investments on other farms due to the uncertainty introduced.

The other factor that’s going largely unremarked is the major negative impact on supplying firms operating in every corner of rural Ireland, said Drennan.

The new ICMSA president pointed out that this uncertainty can be resolved very quickly if the Government states categorically that these items that were previously eligible will be re-instated and that - if necessary - the statutory instrument on this matter should be amended to remove any doubt on this matter.

"Much distress and damage on the matter can be allayed quickly and cleanly by the Government taking decisive action and ensuring that these items will be VAT reclaimable going forward," he said.