The Crofting Commission may be trying to prevent VAT registration of common grazings, according to a legal expert.
A leading crofting lawyer claimed yesterday (MON) that the move would contradict its role in promoting the interests of the sector.
The commission confirmed that it was “taking advice on a range of issues as part of the process of drafting guidance for grazings committees”.
Lawyer Brian Inkster said crofters should be concerned that “someone, possibly the Crofting Commission, is potentially questioning their ability as shareholders in a common grazings to be VAT registered”.
He cited a letter to shareholders in the Upper Coll common grazings on Lewis which stated that, after receipt of legal opinion from Queen’s Counsel, “the position of grazings committees being able to register for VAT as trading entities in order to reclaim VAT has come under scrutiny”.
The letter continued: “Dialogue with HMRC regarding VAT status remains ongoing and once concluded, I will be able to advise on the outcome.”
Mr Inkster is trying to establish “who instructed this legal opinion, who paid for it and why?”
He said: “It can only be assumed that the attempt to stop VAT registration probably lies at the door of the commission.
“We’re already aware that the convener of the commission Colin Kennedy was of the view that common grazings should not receive SRDP funding.”
A spokesman for NFU Scotland, which has almost 800 crofting members, said: “Our focus is getting up-to-date guidance to all grazing committees to ensure they operate in an open and transparent manner and act in the best interests of their active shareholders and the management of the common grazing.
“We’ll ask our taxation experts for an opinion on the issue of VAT registration and engage in the discussion on the matter when the crofting stakeholder forum meets (today, Tuesday) in Inverness to discuss a full range of crofting issues.”
