VAT registrations/exemptions - help!!!!!

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Vix1978

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After reading the article in the H&H yesterday, it would appear that yards offering full/part/diy livery are exempt from VAT, yet some yards seem to charge vat on their value added services?
I've been on the hmrc website, but am still none the wiser.
Can any YO's out there shed some light on this for me?

thankies
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Livery yards
On the subject of horses it is also considered that HMRC should review some of the possible contradiction that exists with the VAT position on horse liveries and the question of when the exemption applies.

Livery yards obtained a potential boost through VAT as the supply charged to clients with minimum service (Business Brief 21/2001) was deemed to be exempt. However, it comes with the downside of the “exempt” supply – not being able to claim back input VAT and possible complexities of partial exemption.

Problems can arise in deciding whether schooling and breaking in are provided. If the yard is mainly a specialist breaking yard, then any supply relating to breaking in will be standard-rated and the provision of livery services will be ancillary to this and therefore standard-rated. On the other hand if the main purpose of the yard is livery with schooling or breaking as an add on, then the entire supply will be exempt.

Where a horse is sent to a yard for the specific purpose of being broken or schooled rather than as somewhere to keep the horse, then the supply will be standard-rated.

Supply of somewhere for the horse to live
Under the interpretation of the Business Brief, where there is a grant of a right or a supply over land, then the supply of livery will be exempt regardless of whether it is full livery or DIY livery as the supply is somewhere for the horse to live.

This brief seems a contradiction to the basic principle of the grant of right over land or the supply of land is exempt as the “full” livery by definition means that the service is not ancillary to the supply of land. Full means a horse being “fully” looked after. The result is that there is a variance in the interpretation of “full”. In many establishments DIY and part liveries are treated as exempt but full liveries are charged standard-rated VAT as it is considered that by definition, the volume of the services provided do not fulfill the basic principle of exemption criteria.

from
http://articles.taxationweb.co.uk/index.php?id=616

explains it pretty well as well
http://www.horsedata.co.uk/*******.asp
 
As a tax advisor I can assure you that providing livery service for horse's is a VATable service, if the business has turnover below £64,000 (this fiscal year, rises every year) then they do not have to register for VAT. The problem is that a turnover of £64,000 is unavoidable if you run a large yard and VAT must be charged to clients.
 
I'm pretty sure that the actual stabling/grazing part is not always vatable though......it is either exempt or zero rated.

It is the extras that are vatable (ie mucking out etc etc).

If you read that H&H article it is pretty clear.
 
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