Michael McDowell (Dublin South East, Progressive Democrats)

Listening to Deputy Ardagh speaking about Dublin South-Central reminds me that agriculture was wiped out in my constituency under a Fine Gael and Labour Government. The nuns on Merrion Road gave up their last few cattle and that was the end of agriculture in Dublin South-East. I warned the Government at the time it would happen, but it was wiped out just like that.

Member states are given some latitude in how they decide to exempt small businesses from the VAT registration requirements. It cuts both ways, as if a company is unregistered, VAT cannot be recovered on inputs. It is not as if the money is all thrown away from the Revenue's point of view. An unregistered trader who falls below the threshold cannot recover VAT on the inputs and cannot pass it on to the customer. That trader would effectively have to take that hit themselves.

The incidence therefore depends very much on the trade. I remember as a barrister the difference between being registered and unregistered was very significant, as it was effectively 21% of everything except the VAT on the paper and pencil and something else. Very little VAT was reclaimable.

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