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'Check for VAT on wool sales' - NFU Cymru advises farmers
30
Aug '11
NFU Cymru is using Monmouthshire Show to advise sheep farmers that they should check for any tax implications when selling wool to Irish merchants.

Ed BaileyIt has emerged that livestock keepers may be liable to a VAT charge on a sale unless it can be proved that the wool has left the UK within three months of the sale.

HM Revenue & Customs (HMRC) says farmers must ensure that they have both the correct documentation and, more importantly, whether the wool is actually dispatched to Ireland rather than used within the UK. If the wool does not leave the UK at all, farmers must charge and account for VAT on the sale as it is a solely domestic UK transaction.

However, when the wool is shipped to Ireland within three months the sale is zero rated for VAT but farmers should be aware of the rules that apply to ensure they are protected.

NFU Cymru President, Ed Bailey, speaking at Monmouthshire Show said, “By taking a few simple steps farmers can avoid hassle and potential fines, including interest payments later on.

“They should obtain the merchant's Irish VAT number and quote this on the VAT invoice raised for the wool supplied. They should also keep copies of any correspondence that shows that the wool has left the UK within three months of it being sold.”

Ed Bailey was however keen to remind Welsh farmers to support the British Wool Marketing Board by saying, “NFU Cymru firmly believes that wool sold outside of the Board auction system at lower prices simply reduces the value of wool to all producers. There is demand for the product and as consumers are becoming more familiar with the environmental and the green agenda - there is huge potential for wool and the time is right for wool. We do however need commitment from producers to support the Board so that we can promote, market and sell wool in order to achieve the best possible price.”

NFU Cymru

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