Following the HMRC ruling last week that AHDB will no longer be able to recover VAT the National Sheep Association (NSA) is speaking out in support of the levy board and its appeal on the decision that will mean it is no longer able to recover an estimated £4million.
 
NSA Chief Executive Phil Stocker says: “NSA is bitterly disappointed over the final decision by HMRC that AHDB will no longer be exempt from paying VAT. This will reduce total financial resources by some £4million with the beef and sheep sector being hit with a £1.4million reduction in cash available to be used to support our industry.
 
“With the total beef and lamb levy being some £16million this equates to a 9% reduction at a time when our industry is going through a massive amount of change and needs additional investment, not less. Coupled with the recent Defra decision not to allow levies to be increased for specific activities this will constrain our levy body just at the point it needs to be doing more.” 
 
The ruling follows HMRC’s formal decision to alter the VAT status of the levy board last Autumn and will now come into effect from next Friday 1^st April 2022.
 
Mr Stocker concludes: “It does make you question whether the UK Government is serious about investing in England’s farming and food production. It is both astonishing and extremely concerning given the global security challenges we are facing that decisions are being taken that reduce investment.”

Nicholas Saphir, AHDB Chair, said last week: “This decision by HMRC is infuriating for AHDB and will rightly anger our levy payers, particularly at a time of such change and uncertainty being faced by farmers.

“This decision will punish levy payers at a time of considerable farming need. It is inexplicable.

“Ever since AHDB was formed we have maintained that we should be entitled to recover VAT and we will continue to fight to try and achieve this. We also have had the support of Ministers in Defra, Scottish Government and Welsh Government in our bid for Section 33 status. They recognise the potential impact on levy payers and I am very grateful to them.

“Our work towards Section 33 recognition - in parallel with a possible appeal through a tax tribunal - has no guarantee of success. In the meantime, HMRC has instructed us to implement its decision and we must comply or face penalties.

“All our 2022/23 budgeting has now been re-calculated on the basis of us not being able to recover VAT. We have left announcing this until the last practical moment because of our ongoing discussions with HMRC and our hope that it wouldn’t reach this point.

“I have no doubt many levy payers will wish to express their feelings directly to ministers at the Treasury.”

Have your say

Registrations are still open for levy payers to have their say on the major challenges for the sheep sector and the work AHDB does to help counter these and NSA is encouraging all sheep farmers in England to sign up by 31st March 2022 to have their say. Registrations can be completed on the AHDB website.