VAT on your livery bill for DIY, anyone pay it and why?

Elsbells

Elsbells

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I've just moved to a small and not yet up and running yard,so at the moment I get a stable with mat and drinker, plus hay and bedding included plus field and that's it. I put out and get in etc so DIY. I've never heard of VAT being charged before so I'd like to know if this is right as it's been added on at 20pc which has made a big difference to what I was going to pay.

I've done all the searches that I can and I'm still confused as YO is insisting it has to be paid ?

Milk and choc cookies if you've got this far.
 
Elsbells said:
I've just moved to a small and not yet up and running yard,so at the moment I get a stable with mat and drinker, plus hay and bedding included plus field and that's it. I put out and get in etc so DIY. I've never heard of VAT being charged before so I'd like to know if this is right as it's been added on at 20pc which has made a big difference to what I was going to pay.

I've done all the searches that I can and I'm still confused as YO is insisting it has to be paid ?

Milk and choc cookies if you've got this far.
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Well, I assumed that the invoice includes VAT, I have never had a bill with VAT on it.
One other thing I am not sure of, is that if business has just started, are they sure they are going to breach the VAT barrier.
They should have told you before you moved there, obviously it is highly relevant.
 
I would guess that your YO has voluntarily registered for VAT so that he/she can claim back VAT on the cost of setting up the yard. You would then need to pay VAT on your livery bill but even so, the price you were quoted should have been the price including VAT.
 
MotherOfChickens said:
I pay VAT on my grazing and have at a previous livery yard-they should have told you up front though.
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TBF I did get a text telling me so 24 hours before the move. With the cost of travel etc, it works out the same as I was paying at my previous yard, but I'm like anyone I guess and don't like paying tax if it's not a requirement.
 
elbee said:
I would guess that your YO has voluntarily registered for VAT so that he/she can claim back VAT on the cost of setting up the yard. You would then need to pay VAT on your livery bill but even so, the price you were quoted should have been the price including VAT.
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Yes, this has what has happened as the barns etc are not built yet. I was under the impression that I'd be required to pay it if my mare was on part or full livery though?
 
If your yard is VAT registered then you'll need to pay VAT on all the services provided including DIY. Some 'sales' are exempt from VAT but I don't think DIY livery would be.
 
elbee said:
If your yard is VAT registered then you'll need to pay VAT on all the services provided including DIY. Some 'sales' are exempt from VAT but I don't think DIY livery would be.
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Thanks for that. I guess an old yard not claiming VAT is the place to be if I don't want to pay, but overall it works out the same cost and it's more convenient. The YO is nice too and that's worth millions.
 
If it's the same cost as you'd pay elsewhere then the fact that your bill includes VAT shouldn't really matter. Sounds like a nice yard :)
 
I run a yard that is VAT registered and we do not charge VAT on DIY as my understanding is you only need to add to a service provided. Obviously DIY is just that there is no service just a box and grazing. So says our accountant any way.
 
I thought that VAT is only payable on services. A large local to me split her yard into DIY and full livery, the person supplying the fully livery pays rent for the boxes and as she has not registered for VAT and her turnover is less than £80,000 her clients pay no VAT. The DIY people do not pay VAT as they are renting the box and grazing and no services.
The farmer I used to be at livery at had a huge amount of land and everything went through the books, VAT was never part of the bill. I think you would have to read the VAT rules but on a small yard I wouldn't have thought it would be worth registering as you have to supply audited accounts every year. I thought you could only reclaim VAT on new build residential.
 
My yard is VAT registered and we'd pay VAT on hay and bedding supplied, services but not stable and grazing
 
I don't know if I paid vat for my diy or not- I don't understand why it wouldn't just be included in the bill though! Why do extra chasing to get people to pay it?
 
See, it confusing. It will be a nice yard once all the building has been done and the school put in. I guess I'll just have to swallow it and pay it as there's no way around it. It grates, that's all. :(
 
Here is the information you want, if you can understand it!

http://www.hmrc.gov.uk/manuals/vfoodmanual/vfood3120.htm

VFOOD3120 - Items benefiting from the relief: animal feeding stuffs: grazing rights
Basic position
Grants of grazing rights (the right to allow someone else’s animals to graze on your land - also known as grass keep lettings) is both the granting of a licence to occupy land and a supply of animal feeding stuffs (grass).

In that situation, the supply of animal feed takes precedence over the supply of a licence to occupy, and the supply is zero-rated. You can identify a grant of grazing rights by examining the contract, which will clearly limit the grantee’s rights over the land to grazing only.

Grazing rights are usually negotiated according to the area of pasture involved. In some parts of the country, while the contract is ostensibly for grazing only, it is the custom for the landowner to provide an element of shepherding or oversight as well. If this oversight extends to more than a seen daily or seen twice daily routine, the supply may be of the keep of animals rather than grazing (see VFOOD3140).

Agistment
Agistment is normally a short-term arrangement for the keep of farm animals. Typically, it arises when a dealer or butcher, who has no facilities of his own, acquires animals which he wants to keep for a week or two until he can sell them or slaughter them. The agister agrees to feed and care for the animals during that period. Agistment is therefore a form of keep and a standard-rated supply.

DIY livery
This is an arrangement where there is a genuine supply of grazing rights or other feed, together with a separate supply of stabling (an exempt supply of rights over land, unless the supplier has opted to tax). It can be said to fall mid-way between a supply of grazing rights and a supply of keep. If the conditions set out in Notice 701/15, Food for Animals are met, the arrangement consists of separate supplies, each liable at the relevant rate of tax, and apportionment of the consideration is appropriate.

As there is less of a distinction between keep and DIY livery, it is particularly important before issuing any assessment to be sure that the necessary elements of care are present: see VFOOD3140.

DIY livery charges are normally negotiated according to the stabling area rented, and the number of animals involved, or as a single inclusive amount per head.
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I am a VAT registered farmer and it galls me that I have to charge 20% on any pony I sell. However, it is not stated in the price as such as that would make the pony seem 20% more expensive than everyone else's. But I have to remind myself that I claim back 20% on all my inputs and the Revenue usually sends me a cheque every quarter -- so I'm not complaining. If I took liveries, I would still charge VAT but would not state this as a separate item on the invoice as I don't think many liveries would be reclaiming it. I keep telling he VAT office that my ponies are bred for meat and should be zero rated and it's not my fault if people WILL ride them, but they just won't play ball.:D

So I'd suggest the OP's YO is making a psychological error in stating VAT as a separate amount. If they'd just included it in the price and said nothing, her clients would be happy. Ignorance is, as they say, bliss.

Sorry for the lecture!
 
Most yards I have been on have been VAT registered businesses and no VAT charged seperately, I would make sure the accountant is certain.
most places provided hay and as someone mentioned no VAT on that.
 
In the past I was on a yard where it was explicit that the cost (Full Livery ) included VAT, I know the YO paid it so made sense to charge it. Is that problem that in this case you are aware of it and it seems an extra charge on you? I imagine you will have paid it at other yards and they have just not made it explicit in the costs.

If you like the yard and everything else at least you can take heart they are doing everything above board :D
 
Dry rot is correct, it is a psychological error. If I'd been told x is the fee and nothing of the VAT I wouldn't of flinched. I guess my YO was being fair and honest with me about the charges.
 
They should not be charging vat on do-it-yourself livery. If they are then contact Revenue and Customs and they will arrange for you to be refunded.
 
If they are VAT registered and need to be charging VAT then fair enough... but I do think they should have quoted a VAT inclusive price.

It's not as is you, the customer, are a business who can claim VAT back!
 
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