When farmers sell produce through farmers’ groups and
co-operatives, the goods - for example grain - are combined with
the produce of other farmers. The buyer then has no way of knowing
whether a flat rate farmer has supplied any of the goods.
In these cases, the person buying the goods should pay the
farmers’ group only the price agreed for the agricultural
produce, without the flat rate addition. The farmers’ group
should instead pay the 4% addition to flat rate farmers, when the
proceeds of the sale are shared out. The farmers’ group can
then reclaim the amount charged as though it were input tax, when
the group submits its normal VAT return.
