Mr. Niall Cody:

I cannot be held to account for what farm advisers promote. I have seen cases where the suppliers of some of this machinery say it will be deductible. They are not in a position to give tax advice. We are implementing the scheme as it is provided for. We do not have the legislative authority to develop the scheme ourselves, having regard to advances. We can see that some of the increase is around the fact that the TAMS for agriculture provides greater grant aid for some of the necessary development. The Cathaoirleach knows where I am from and I know some of the farms he talks about. The challenge is that we have legislation which we have to implement. There is no doubt that the landscape for farming has fundamentally changed from when the legislation was introduced. The reality is that from the perspective of EU and Irish law, any farmer can register for VAT and get it back. I am not sure what the figure is but let us say 15% of farmers are registered for VAT. Traditionally the farmers who did so were tillage farmers because they had a highly capital-intensive operation, particularly the bigger ones who required combine harvesters and other machinery. These farmers tended to register for VAT. As dairy farming gets more intensive and capital intensive, there is a question about whether the flat-rate scheme is the perfect model for them but that is a decision for themselves. There is an implication for the flat-rate addition. If a farmer is registered for VAT, they do not receive the flat-rate addition