TUV highlights the impact of cross-border VAT differentials on local agriculture

Mr Allister had sought clarification on whether the Republic’s scheme, which was reviewed by the Irish authorities and found to have resulted in substantial over-compensation within the broiler sector, had been assessed for its potential impact on Northern Ireland farmers and considered in the context of the Windsor Framework.

In its response, HMRC confirmed that, while it is aware of the Irish review and the subsequent removal of the poultry broiler sector from the scheme, the Government “has not undertaken a formal assessment of the impact of the Republic of Ireland’s agricultural VAT flat-rate scheme on Northern Ireland producers”.

Commenting, Mr Allister said: “This response amounts to an admission that no assessment has been undertaken of the impact on Northern Ireland producers. Given longstanding concerns about over-compensation within the Republic of Ireland’s agricultural VAT flat-rate scheme, that is a remarkable position. Northern Ireland farmers are entitled to know whether they have been placed at a competitive disadvantage. Instead, the Government appears to have shown little interest in finding out.”

The North Antrim MP concluded: “At a time when ministers repeatedly point to the Windsor Framework and its implications for Northern Ireland, one would have expected them to have examined a matter with potentially significant consequences for local producers. The fact that no such assessment has been carried out is deeply disappointing.”

In its response to the queries raised by Jim Allister, HMRC points out that the UK government is aware of the review undertaken by the Irish authorities on the operation of the Republic of Ireland's agricultural VAT flat-rate scheme, including the decision to remove the poultry broiler sector from the scheme from September 2025.

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Up to this point, however, UK authorities have not undertaken a formal assessment of the impact of the Republic of Ireland's agricultural VAT flat-rate scheme on Northern Ireland producers.

The letter from HMRC to the North Antrim MP continues…“Under the Windsor Framework, we remain responsible for VAT administration and for collecting revenues in Northern Ireland, as it is an integral part of the UK VAT system.

“The operation of the Republic of Ireland's agricultural VAT flat-rate scheme, including questions about its design and compliance with applicable requirements, is primarily a matter for the Irish authorities and, where relevant, the appropriate European Union institutions.

“The government knows that farming is important in maintaining the nation’s food security, supporting the rural economy and managing the natural environment.

“It is committed to creating the conditions in which farm businesses can be profitable, resilient and able to plan for the long term.

“This includes support through initiatives such as the Farming and Food Partnership Board, the Sustainable Farming Incentive and its commitment of at least £200 million to the Farming Innovation Programme by 2030.”