Contractors pitch for stricter Revenue rules
The Association of Farm Contractors of Ireland (FCI) has warned that Ireland is leaving itself open to heavy EU fines by not clamping down on contractors who are not tax compliant.
The FCI is seeking changes in legislation which would make the inclusion of PPS or VAT numbers compulsory on all receipts issued by contractors for farm work.
The call for action follows on from a well-attended protest outside the Dáil recently.
It was called to highlight the activities of illegal contractors who are not charging VAT and have no insurance cover for work they do for farmers.
The FCI claim that cut-price deals offered by black market operators was one of the primary reasons for legitimate operators being forced out of business.
"A lot of guys have quit silage making in particular in the last year, and more will quit between now and the start of the season," said FCI secretary, Peter Farrelly.
Mr Farrelly said the FCI had highlighted loopholes in current legislation to Revenue.
He said these loopholes facilitated illegal book-keeping practices common among unregistered contractors.
"Farmers have a special exemption with Revenue at the moment where they don't have to get a receipt from a contractor for any work up to €5,000," claimed Mr Farrelly.
"This is allowing some farmers to write the names of legitimate contractors into their chequebook stubs but actually they issue the cheques to black economy contractors," claimed Mr Farrelly.
The FCI have proposed a system where farmers must be able to show a receipt for any work done by a contractor in order for it to qualify as a tax deductable expense. In addition, the FCI want the Revenue to insist that all contractor receipts include a VAT or PPS number.
"That's the only way for us to ensure that black-market operators don't issue micky mouse receipts that the Revenue can't trace back.
"There are some small contractors out there that don't want or need to be VAT registered, and we've no problem with that. But if they are legitimate operators, then they should have no problem giving a PPS number instead," said Mr Farrelly.
The FCI are set to meet with Revenue next week to outline their proposals for the 2014 Finance Act.
Earlier this year, Minister for Finance Michael Noonan said that a change in legislation to make PPS or VAT numbers compulsory on receipts would be a disproportionate response. In addition, farm organisations are understood to be wary that such a move will create additional paperwork for farmers.
Local contractors have recruited support from the European association of contractors, who have pointed out to officials here that Ireland is leaving itself open to EU fines should audits show that black market contractors continue providing services such as hedge-cutting that enable farmers to qualify for EU subsidies such as REPS.
"We're the only country in the EU that allows a black market in contracting to flourish. It is also leaving farmers exposed to huge claims if anything ever happens to a worker when these unofficial operators are on their farms. I've seen cases of this already and there's sure to be more," added Mr Farrelly.
Mr Farrelly said diesel costs for a silage outfit had rocketed from less than €10,000 per week six years ago to €20,000 per week.
"Without credit lines to fund this from fuel companies or banks, some operators are packing it in," he claimed.
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