The Irish Co-operative Organisation Society (ICOS) has reiterated its call for the flat-rate addition to be amended.

Since January 1, the flat-rate VAT top-up for farmers was changed to 4.5%, which is down from 5.1% in 2025.

The flat-rate scheme is for farmers who are not registered, or required to register, for VAT.

The scheme is designed to compensate farmers for the VAT they incur on farming costs without having to register.

ICOS

An ICOS delegation met this afternoon (Tuesday, April 28) with Department of Finance officials to discuss the current anomaly affecting marts and farmers due to the rate change.

The delegation included Ray Doyle, ICOS livestock and environment executive, Stephen Hannon, general manager of Aurivo Marts, Maurice Lyons Golden Vale Marts chief executive officer and Michael O’Connell, Cork Marts financial controller.

ICOS had strongly opposed the measure which was included in Budget 2026.

The delegation said the change is now having a discriminatory impact on livestock marts and non-VAT registered farmers.

ICOS reiterated its call for the flat-rate addition to be amended to ensure farmers selling livestock through marts are not disadvantaged.

The organisation noted that livestock sales remain subject to the 4.8% VAT rate, while the flat-rate addition has fallen to 4.5%, meaning that farmers are under-compensated.

VAT

ICOS also raised concerns that the formula used as the basis for the change has yet to be provided.

The organisation said if the State needs to balance the VAT system, it should be managed over an extended period "rather than through a sharp deduction in one year that penalises farmers and marts".

"We made the case that the Flat-Rate Addition should be adjusted to align with the livestock VAT rate so that the scheme continues to fully compensate farmers, as originally intended, without distorting competition or imposing a hidden cost on livestock producers," Ray Doyle, said.

"ICOS will continue to engage constructively with the department, but our position remains firm.

"This is obviously also a priority in the current inflationary climate which is burdening rural communities with additionally excessive costs," he added.