Are farmers losing out at marts because of flat-rate changes?
Why are some farmers talking about an increase in the cost of selling livestock and wondering if marts have increased their commission rates?
It might have more to do with changes announced in Budget 2026 than they might think.
Since January 1 the farmer's flat-rate addition for 2026 has been 4.5%, which is down from 5.1% in 2025.
This reduction means that non-VAT registered farmers will no longer be fully compensated for VAT in all circumstances, according to the Irish Co-operative Organisation Society (ICOS).
"Where livestock sales are subject to the statutory 4.8% VAT rate, the lower 4.5% flat-rate addition will create a shortfall that did not previously exist, resulting in unequal treatment for farmers as they sell their animals.
"Essentially, this is a penalty, as it creates an additional 0.03% charge for non-VAT-registered farmers selling animals," according to the ICOS.
When the changes were announced in Budget 2026, Ray Doyle, livestock and environmental executive of ICOS said: “The flat-rate scheme is meant to be simple, neutral, and fair for farmers who are not VAT registered."
“This change creates an anomaly where full VAT compensation is no longer achieved in all cases.
"On a typical sale of an animal for say, €1,000, the farmer will lose €2.86 per head."
"It may not sound like much for a single sale, but it will all add up to several million euro of a loss for the sector when you take into account the overall sales volumes of livestock in Ireland."
Stephen Drury from Cootehill Mart in Co. Cavan told Agriland that: "Traditionally, flat-rate VAT was there to compensate farmers for VAT paid on inputs like fertiliser, fuel, contractors, etc."
He said that until the end of 2025, a farmer selling stock was getting approximately €3 back for every €1,000 worth of livestock sold.
Since January 1, 2026, however according to Drury that position has flipped and a farmer is effectively giving roughly €3 back for every €1,000 sold.
He explained that previously when an animal was sold for €2,500, the farmer would get approximately €7.50 back via flat-rate VAT before mart fee deductions.
"Since the change to flat-rate VAT, around €7.50 less is going to the farmer resulting in a net change per animal of about €15," he added.
According to Drury "on its own, that might not look huge, but over numbers, it adds up" and said it works out like this:
- 10 cattle = €150 difference;
- 50 cattle = €750 difference;
- 100 cattle = €1,500 difference.
He added: "It's so obvious because cattle are so dear at the moment.
"We see farmers selling €50,000 worth of cattle and there's €150 of a fee on it on top of haulage and commission.
"It looks like it's the mart taking extra commission. A lot of farmers just don't understand what this flat-rate VAT means so it's kind of a negative thing for the marts".
He also noted that there is no difference in how farmers interact with marts.
"There’s no paperwork change and nothing farmers need to do differently.
"It’s simply a change in how the refund works, and the impact only really shows when you sit down and add it up," Drury said.
