Beef Farming: Agricultural Flat Rate Scheme

Part of Oral Answers to Questions — Agriculture, Environment and Rural Affairs – in the Northern Ireland Assembly at 2:45 pm on 17th November 2020.

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Photo of Edwin Poots Edwin Poots DUP 2:45 pm, 17th November 2020

This refers to valued added tax, which is a reserved matter and therefore the responsibility of HM Treasury and HMRC. The changes that will be made to the agricultural flat rate scheme from 1 January 2021 are that farm businesses can join the scheme if their turnover from farming-related activities is less than £150,000 and that they are required to leave the scheme if that turnover subsequently exceeds £230,000. That brings the scheme into line with the general flat rate scheme.

The agricultural flat rate scheme is intended to provide easement from the administrative burden of VAT registration by allowing farmers to receive a payment equal to 4% of their sales value in lieu of VAT paid on inputs. The vast majority of small beef and sheep farmers will continue to be eligible for the scheme. Where farms exceed the turnover limit, they can still be VAT registered and reclaim input VAT. The flat rate scheme is intended to be fiscally neutral and not to be more generous than being VAT registered.