VAT implications on livery... anyone know?

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Foxfolly

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My husband is currently VAT registered for the Farm business.
We are considering running a small livery yard within the farm and I wondered if anyone knows what services are vatable and what are exempt?

I have found some partitions which we will be charged VAT on so is it worth putting them through the business to claim the VAT back or is it easier just to pay out of our own money and not run it through the existing business, and keep the farm business seperate to the livery???

I know we don't pay vat on animal feed for the cattle etc. but any labour my husband charges out or contract in is Vatable.... it a mine field!! HELP!!
 
Hi There. I'm on a yard that charges VAT and we get charged on all services, livery, trailer parking etc, everything except feed/hay/straw/haylage. A good tip for advertising the yard however, would be to 'include VAT' on your charges. When i moved to my yard i was a bit miffed about forking out and getting charged VAT that I can't reclaim- clever marketting
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If you are VAT registered you have to charge livery on services provided - but not on stables and grazing - so no VAT for DIY. split your part and full livery into services provided (Vatable) and then provision of stable and grazing. I split 80/20 80% stable and grazing and 20%services. You also don't charge VAT on feed - as you won't be charged VAT on it.

We are VAT registered and it has been well worth it for us as we have had to pay for lots of work being done to the farm for the horses, new fencing, gates, paths, internal stables etc. Also had to buy tractor and implements for the livery. We have had about 12k back in VAT in the first year - and we charge about £100 in VAT a month to our livery customers - however we don't add the VAT on to the prices we charge - we simply absorb the cost and pay the VAT. There is a price you can charge for livery and that is the maximum - customers will not pay additional VAT.
 
Hi Bosworth

interesting you say that VAT isn't charged on DIY - i am DIY and charged....you seem to know your stuff, can you give me some amo to use on my YO. they are renown for getting every penny they can but if they aren't supposed to i'll gladly inform them
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I THINK livery is vat exempt. You need to check this but I found an old article in horse and hound that said something along these lines.

If you are going to be open about running a livery yard and run it as a proper business I would suggest you ring the VAT people and ask them direct. I think it can be quite complicated.

I know someone who had been told that livery was exempt. The VAT then tried to get him to pay 5 years worth of tax. It took a year but he didn't have to pay it .

When you ring the VAT people they will ask if you want a reference number for your call to them. YES. and keep note of it. If they tell you it IS VAT exempt ask for it in writing, even if they just email it through to you and keep that with your ref number. Then should there be a problem you have all the references to back you up.
 
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Hi Bosworth

interesting you say that VAT isn't charged on DIY - i am DIY and charged....you seem to know your stuff, can you give me some amo to use on my YO. they are renown for getting every penny they can but if they aren't supposed to i'll gladly inform them
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It really depends if the person supplying the service i.e the yard owner has an option to tax on the land/stable they are providing you. If they do then VAT is charged.

Also the supply may not qualify as a right over land and would not qualify as exempt. i.e if you do not have exclusive use of the stable
 
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If you are VAT registered you have to charge livery on services provided - but not on stables and grazing - so no VAT for DIY. split your part and full livery into services provided (Vatable) and then provision of stable and grazing. I split 80/20 80% stable and grazing and 20%services. You also don't charge VAT on feed - as you won't be charged VAT on it.

We are VAT registered and it has been well worth it for us as we have had to pay for lots of work being done to the farm for the horses, new fencing, gates, paths, internal stables etc. Also had to buy tractor and implements for the livery. We have had about 12k back in VAT in the first year - and we charge about £100 in VAT a month to our livery customers - however we don't add the VAT on to the prices we charge - we simply absorb the cost and pay the VAT. There is a price you can charge for livery and that is the maximum - customers will not pay additional VAT.

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Hey Bosworth what you say is not exactly true, you only charge vat on livery services in certain circumstances. The first question to ask is do you have an option to tax on the stables concerned? If not then your full supply of livery is exempt

If there is no option to tax then the £12k you have reclaimed has been recovered in error and should be repaid to HMRC immediately, if you dont declare this you could be hit with penalties and interest

Also with regard to feed, you can only zero rate the supply of feed if no element of care is provided i.e you sell a bag of feed to a customer, if you are charging for feed you are providing to the horses as part of an element of care you should be charging VAT

With regard to the 80/20 split i would not just appliy these figures without a method of calculating the % and would also seek approval from HMRC
 
We have talked to the VAT office - we have taken the option to tax. We have discussed the 80/20 split with the HMRC and it works for us. It is a very subjective area - everyone you speak to in HMRC plus all the accountants treat Vat slightly differently and it is up to each person individually to work out what is correct for their situation.
 
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We have talked to the VAT office - we have taken the option to tax. We have discussed the 80/20 split with the HMRC and it works for us. It is a very subjective area - everyone you speak to in HMRC plus all the accountants treat Vat slightly differently and it is up to each person individually to work out what is correct for their situation.

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Ok fair enough if you have an option to tax on the property then you are correctly charging VAT on the livery services but to make a statement that "if you are VAT registered you have to charge VAT on livery services" is completly wrong and it appears you knew this. If the OP followed your advice they could be incorrectly charging and recovering VAT that could have ended them in hot water with HMRC and in a lot of debt!

AS for the split you are right in saying its up to each individual to work out there own split by there own methods to suggest the 80/20 is acceptable again is misleading
 
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I had this conversation with my YO and he sais he does not have to charge vat on livery only if he provides services for us.

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Again this may not be right.

Services as a part of the livery should be exempt unless there is an otion to tax, these services may include:

feeding or turning the animal out to graze;
mucking out, spreading straw or other bedding;
worming and clipping;
grooming and plaiting; or
taking on any responsibility for the welfare of the animal, including arranging for veterinary treatment,


The only thing the YO should be charging VAT on (if there is no optiont to tax) are the clearly identifiable separate supplies such as veterinary services
 
Iknoweverything - well you might but I am afraid your bolshy attitude means I really don't want to know what you know unless you can write politely and pleasantly


"Ok fair enough if you have an option to tax on the property then you are correctly charging VAT on the livery services but to make a statement that "if you are VAT registered you have to charge VAT on livery services" is completly wrong and it appears you knew this. If the OP followed your advice they could be incorrectly charging and recovering VAT that could have ended them in hot water with HMRC and in a lot of debt!

AS for the split you are right in saying its up to each individual to work out there own split by there own methods to suggest the 80/20 is acceptable again is misleading "

It is not completely wrong and your comments are antagonistic - I am correct in what I have said for my situation. You are covering all situations and I am being specific. I have not advised anyone to use the 80/20 split - I have just stated that that is how I am working it out.

Anyone setting up a yard needs business advice - and financial advice covering tax/VAT and insurance is vital. I personally would look to this forum as giving me a guide - but I am intelligent enough to realise that every situation is different and professional advice needs to be sought.
 
i would also like to point out that if you have an option to tax on the land/property then you should also be charging VAT to your DIY customers. In fact you should be charging VAT on everything with the exception of feed (if this is not provided as part of your element of care) and grazing if there is no livery provided to that customer

If you have not been charging or accounting for VAT on these supplies then i suggest as a matter of urgency you look back over your books and records and declare any shortfalls of VAT to HMRC asap

Glad i could help
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Iknoweverything: Oh my god, you sound really rude with your replies & demands, do I take it you work for Inland Revenue!!! It certainly sounds as though you do with the same tunnel vision as the majority of the tax office staff! As a 'Newbie' one would usually reply to these threads with a little less of a forthright reply, we all have the same reason for being on the Forum : Horses & advice about them so it is good to make friends here not Enemies before you even get started.
 
Hey Drssage babe, no unfortunatly i dont have a cushy job working for the inland revenue. Maybe i should apply for a job if you think i have what it takes
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. I was originally trying to help out the members as i have a bit of experiance in this field (excuse the pun) and was trying to advise bosworth that if he has declared the wrong amounts then to contact the tax man otherwise they could hit him/her with interest/penalties etc. Once i mentioned this bosworth admits to knowing about option to tax and actually has one in place. So now we know that Bosworth decided to give the OP totally wrong advice that could have ended the OP in serious bother with the tax man yet noone mentions this and gets on at the newbie.
As for the my demands as i said, It is in Boswoth best interests to declare these errors prior to th tax man finding them.
 
Hi Do you know if livery yard owners have to pay vat on their own horses ?
Bosworth said:
If you are VAT registered you have to charge livery on services provided - but not on stables and grazing - so no VAT for DIY. split your part and full livery into services provided (Vatable) and then provision of stable and grazing. I split 80/20 80% stable and grazing and 20%services. You also don't charge VAT on feed - as you won't be charged VAT on it.

We are VAT registered and it has been well worth it for us as we have had to pay for lots of work being done to the farm for the horses, new fencing, gates, paths, internal stables etc. Also had to buy tractor and implements for the livery. We have had about 12k back in VAT in the first year - and we charge about £100 in VAT a month to our livery customers - however we don't add the VAT on to the prices we charge - we simply absorb the cost and pay the VAT. There is a price you can charge for livery and that is the maximum - customers will not pay additional VAT.
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Just a little thing I went through at a previous yard,.. what I found out as a livery customer was that if I bought a bag of feed off the YO (that had bought it in and then sold to me) I paid VAT on top of the basic cost of that said bag of feed as YO had 'provided a service' to supply me with said feed. So,....I did some homework myself on Livery VATable charges etc,..(which by the way is a real minefield) and I duly bought in my own bag of feed and saved myself a few pennies! YO actually wasn't very happy with me as I'd sussed them out as far a 'vat exempt feed' and their charges were concerned, as they were pretty devious at charging over the odds for a lot of things...but heh that's another story!!

A minute point I know in the grand scale of things as far as this particular thread goes....but thought some may be interested to know the above!
 
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