Yard Owners question - registering for VAT on DIY grass livery yard business

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WFL2019

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I have a DIY grass livery yard, no stables, over the past 18 months I've invested several thousand pounds on the business, improving the currents paddocks and also putting new ones in. I pay tax on the business through self assessment but am not VAT registered. In my tax return I have claimed the costs against income. A google search shows a few pages done by accountancy firms (essentially adverts with a bit of info to draw you in) that state that grass livery is zero rated, the YO doesn't charge VAT but can recover it on associated costs. Also when you register for VAT you are able to claim up to 4 years prior to registration.

I am interested in other YO's experiences with VAT, specifically grass livery and whether any difficulties have been encountered with HMRC. For the most part I have invoices with the VAT number of the supplier on there, not all have my details on though as some I paid card and they were smaller purchases and didn't request my name/address/business name etc..., can they still be used when they don't include my details?
 
Mmmmm zero rated or exempt service - a completely different scenario. I would expect livery with a stable is exempt, with no vat reclaimable but would need to research further.
Also offsetting all your refurbishment expenses is questionable. I would suggest speaking to an accountant.

Duh just reread that there are no stables, so zero rated would be right, so worth looking into registering.
 
I'm a YO with just one DIY livery; and I fill in a self-assessment form (correction, a book-keeper does it on my behalf), and I've never gone for VAT registration; didn't know you could!

But perhaps OP you are running a much bigger concern than I am.

Think you need in the first instance to arm yourself with information; I'd be talking to people who might be able to advise you. You really need someone who is experienced in this sort of area; an accountant who has no axe to grind (or commission to earn!!) might be your best adviser.
 
I’m no longer a yard owner but I now work in VAT repayments, I’d advise speaking to an accountant as there are hoops to jump through when you are registered for vat and you are creating work for yourself when you may not necessarily be able to claim a lot back (I don’t know how much you’ve spent on the business, but I know when I ran my own that time was precious!)

Remember HMRC have a right to visit and inspect your invoices to verify claims and can withhold any repayments until they are satisfied with the evidence. This can take months if evidence not forthcoming. A lot of people get very annoyed by this ‘intrusion’ (it’s public money we have a duty to check!) so if you’re the type of person not to keep accurate records and would object to an officer inspection at your premises (could last a day or two depending) then voluntary registration is not for you. There are also fines for inaccurate and late or missing claims. You must file a return on time even if zero inputs /outputs or you will get an assessment - a tax due based on what HMRC think you might have had to pay, this is always a payment to HMRC not a repayment even if you usually submit repayments.

Remember you would need to charge VAT to your customers, I appreciate that your supply is currently zero rated but what if that changes or you begin making other supplies? Do you teach/buy and sell horses or equipment etc. Would you still be competitive if you charged VAT? If you are reclaiming vat eg for a farm vehicle you would have to charge that and declare when you sell the vehicle, in which case you may owe a tax due to HMRC.

I’m not able to give you specific advice sorry but these pages answers your q about previous invoices quite clearly:
https://www.ross-brooke.co.uk/knowledge-hub/reclaim-vat-on-expenses-before-vat-registration/

https://www.freeagent.com/guides/invoicing/tips-vat-invoice/


I hope this has helped a bit but I would chat to an accountant if you think your repayments would be worth the work. Remember also that even if you have an accountant do your returns for you, you are responsible for any inaccuracies, so make sure it’s a decent one!
 
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VAT returns have to be done on line now with special software. After doing my VAT returns for 40 odd years I now have to employ someone to come and operate the software! Being a farm it is worth it, but would you really have that much?
 
I can answer your question.
As a livery yard that does not offer any services you may not charge VAT.
Neither can you claim it back.
If you were to try to do so then you would find that you would have to spend a lot of money and eventually get nothing back!
Keep your financial affairs as simple as they are and do not be tempted to do anything else.
 
benz said:
I’m no longer a yard owner but I now work in VAT repayments, I’d advise speaking to an accountant as there are hoops to jump through when you are registered for vat and you are creating work for yourself when you may not necessarily be able to claim a lot back (I don’t know how much you’ve spent on the business, but I know when I ran my own that time was precious!)

Remember HMRC have a right to visit and inspect your invoices to verify claims and can withhold any repayments until they are satisfied with the evidence. This can take months if evidence not forthcoming. A lot of people get very annoyed by this ‘intrusion’ (it’s public money we have a duty to check!) so if you’re the type of person not to keep accurate records and would object to an officer inspection at your premises (could last a day or two depending) then voluntary registration is not for you. There are also fines for inaccurate and late or missing claims. You must file a return on time even if zero inputs /outputs or you will get an assessment - a tax due based on what HMRC think you might have had to pay, this is always a payment to HMRC not a repayment even if you usually submit repayments.

Remember you would need to charge VAT to your customers, I appreciate that your supply is currently zero rated but what if that changes or you begin making other supplies? Do you teach/buy and sell horses or equipment etc. Would you still be competitive if you charged VAT? If you are reclaiming vat eg for a farm vehicle you would have to charge that and declare when you sell the vehicle, in which case you may owe a tax due to HMRC.

I’m not able to give you specific advice sorry but these pages answers your q about previous invoices quite clearly:
https://www.ross-brooke.co.uk/knowledge-hub/reclaim-vat-on-expenses-before-vat-registration/

https://www.freeagent.com/guides/invoicing/tips-vat-invoice/


I hope this has helped a bit but I would chat to an accountant if you think your repayments would be worth the work. Remember also that even if you have an accountant do your returns for you, you are responsible for any inaccuracies, so make sure it’s a decent one!
Click to expand...


absolutely excellent advice. I investigated business accounts for HMRC on the other side ie Income tax and worked closely with VAT.
I would suggest that if you make a claim for up to 4 years on your own it may flag up sufficient risks for it to be checked before repayment is made. That could be very intensive checking. I am sure your record keeping is excellent but you may need to be prepared for that.
Re your last 2 lines if anyone wanted to verify the source of small card payments they would check these with your business bank statements. The invoices would be acceptable as detailed in the 2nd link above.

Like Benz I would advise you to speak to an accountant and let them submit your initial repayment claim if you are going back over earlier years. This is one area where professional advice is invaluable.
 
benz said:
I’m no longer a yard owner but I now work in VAT repayments, I’d advise speaking to an accountant as there are hoops to jump through when you are registered for vat and you are creating work for yourself when you may not necessarily be able to claim a lot back (I don’t know how much you’ve spent on the business, but I know when I ran my own that time was precious!)

Remember HMRC have a right to visit and inspect your invoices to verify claims and can withhold any repayments until they are satisfied with the evidence. This can take months if evidence not forthcoming. A lot of people get very annoyed by this ‘intrusion’ (it’s public money we have a duty to check!) so if you’re the type of person not to keep accurate records and would object to an officer inspection at your premises (could last a day or two depending) then voluntary registration is not for you. There are also fines for inaccurate and late or missing claims. You must file a return on time even if zero inputs /outputs or you will get an assessment - a tax due based on what HMRC think you might have had to pay, this is always a payment to HMRC not a repayment even if you usually submit repayments.

Remember you would need to charge VAT to your customers, I appreciate that your supply is currently zero rated but what if that changes or you begin making other supplies? Do you teach/buy and sell horses or equipment etc. Would you still be competitive if you charged VAT? If you are reclaiming vat eg for a farm vehicle you would have to charge that and declare when you sell the vehicle, in which case you may owe a tax due to HMRC.

I’m not able to give you specific advice sorry but these pages answers your q about previous invoices quite clearly:
https://www.ross-brooke.co.uk/knowledge-hub/reclaim-vat-on-expenses-before-vat-registration/

https://www.freeagent.com/guides/invoicing/tips-vat-invoice/


I hope this has helped a bit but I would chat to an accountant if you think your repayments would be worth the work. Remember also that even if you have an accountant do your returns for you, you are responsible for any inaccuracies, so make sure it’s a decent one!
Click to expand...
Perfect answer.
 
I knew a yard owner who was registered for VAT. The stables were rented as a block to a groom/instructor who did not charge vat on the stable or the services. If was one of the best run yards I have ever been on as the owner really invested in the land.
 
PeterNatt said:
I can answer your question.
As a livery yard that does not offer any services you may not charge VAT.
Neither can you claim it back.
If you were to try to do so then you would find that you would have to spend a lot of money and eventually get nothing back!
Keep your financial affairs as simple as they are and do not be tempted to do anything else.
Click to expand...
Why do you think she can’t claim VAT back? If she registered for VAT and bought VATable goods but supplied VAT exempt services then she would be in a reclaim position.
Years ago I worked for a dairy (doorstep delivery). We were always in a VAT reclaim position because milk, cheese, cream etc are zero rated but the goods we bought (parts for the milk floats, cleaning chemicals etc) were standard rated VAT and we could reclaim the VAT.
OP, speak to an accountant / bookkeeper and get professional advice.
It’s correct that you now need to submit your VAT via an online portal. You’ll need to buy some software or pay an accountant / bookkeeper to submit it for you as an agent.
 
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