The National Farmers Union is advising sheep farmers to check for any tax implications when selling wool to Irish merchants.  The union said livestock keepers may be liable to a VAT charge on a sale unless it can be proven that the wool has left the UK within three months of sale.

According to HM Revenue & Customs (HMRC), farmers must ensure that they have the correct documentation in order. Furthermore, 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. If the wool is shipped to Ireland within three months the sale is zero rated for VAT. Nevertheless, the NFU said farmers should be aware of the rules that apply to ensure they are protected.

Farmers should obtain the merchant’s Irish VAT number and quote it on the VAT invoice raised for the wool supplied. It is also prudent to keep copies of any correspondence that shows that the wool has left the UK within three months of it being sold.

NFU livestock board chairman Alistair Mackintosh commented, “By taking a few simple steps farmers can avoid hassle and potential fines, including interest payments later on.”