Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

I thank Deputy Doherty for his amendment. Farmers are not obliged to register for VAT vis-à-vis supplies of agricultural produce. A farmer who is not registered is known as a "flat-rate" farmer and will not have a VAT number. Under VAT legislation, the invoice or settlement voucher issued for the supply of agricultural produce or services is required to include the full name and address of the flat-rate farmer who supplied the goods or services. There is no requirement under VAT legislation to include a PPS number on any invoice or similar document issued to a customer. In general, a flat-rate farmer does not issue an invoice but instead a settlement voucher is issued by the mart or the factory. Any new rule requiring the inclusion of additional information such as a PPS number on a VAT invoice or settlement voucher would impose an additional administrative burden on these businesses.

New measures to improve compliance are always being considered and it is important that those measures are proportionate. Given the potential impact of the proposed amendment on all farmers, including those not providing agricultural services, and on the food industry, careful consideration would have to be given to any such proposal to ensure that it is proportionate to the risk it seeks to address. My understanding is that this is an issue raised by many contractors in the context of tax compliance and the prevalence of black market activities, as Deputy Doherty has pointed out. However, this would be a very strong measure to take vis-à-vis very small farmers who would be regarded as flat-rate farmers. It may be a very difficult issue for them and also, on an administrative and bureaucratic basis, difficult to put in place. There is also an issue in the longer term of how exactly all of this is to be tracked. That is my initial response to the amendment.