VAT creates a grave situation

Payment of VAT on graves in newly developed graveyards is an unfair imposition on hard pressed communities, Clare Independent TD Dr Michael Harty maintains.

The Minister for Finance Michael Noonan has told Deputy Harty that while the provision of services by an undertaker is exempt from VAT, the exemption does not extend to the supply of graves.

However, the minister, in a written reply to a parliamentary question, said the supply of a grave in a graveyard that is more than five years old is also exempt from VAT but the supply of a grave in a newly developed graveyard is liable to a VAT rate of 13.5%.

Minister Noonan added that the operator of a newly developed graveyard is entitled to VAT deductibility on their development costs as well as ongoing maintenance costs during the period where VAT is applied to the supply of graves.

“I don’t understand,” said Dr. Harty, “ why graveyards over five years old are exempt and new plots are not, especially as many local community groups such as Kildysart as are working hard to provide new facilities. I want to see all grave plots exempt from VAT and I propose to lobby the minister to introduce the necessary changes in the next Budget. The existing imposition on new graves is a revenue generating exercise and is socially undesirable.”