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-- Posted by Trezara on Oct. 2, 2001
Has anyone had any success persuading their yard not to
charge VAT on their livery bill? VAT on my bill is
almost £100 a month which I could well do without. I
don't want to be too pushy with the yard owner as I am
SOOOOOOO happy there, but it's a lot to be overcharged per
month.
If you did get VAT removed - how did you persuade them?
-- Posted by AlisonWoods on Oct. 2, 2001
It rather depends on how you are being billed. Suggest
they bill you for stable rent separately - rent is not VATable
whilst services are (mucking out etc). If they cover a
lot of basic services under the banner of rent then the VAT
portion would be reduced for you and for them. You
should also bear in mind that the VAT status of livery yards
and riding schools is going to change very shortly. They
really should consult their accountant with regard to VAT.
It may be beneficial to all in that they may be able to
charge slightly more in the way of rent whilst reducing the
VAT they pay. Your overall bill will reduce and their
takings could also increase. Most importantly get them
to talk to an accountant who is up to speed on horsey issues.
-- Posted by JanetGeorge on Oct. 2, 2001
There was a change to the treatment of livery for VAT
purposes following a test case a few months ago - more http://www.saddle-up.org.uk/News/pr-3.htm
Many yard owners would not want to backdate changes, because
that could mean THEY would have to pay back the VAT they
reclaimed on building, equipment etc.
They can opt to charge VAT but unless they're planning a lot
of expenditure on non-exempt supplies, I wouldn't have thought
it would be worth their while because most of the regular
costs of a livery yard (feed, labour etc.) do not attract VAT
so it's a lot of paperwork for nothing.
It's possible your yard owner doesn't know about the changes -
have you inquired?
-- Posted by Roo on Oct. 2, 2001
If a yards turnover is more than £52K
they have no option but to become registered for VAT, which
means nasty mr tax man gets even more of your hard earned
cash.
A yard can also voluntarily register if their earnings are
below this. This means that they must charge their customers
when appropriate but they will get any VAT back on their
purchases. This can be beneficial if their customers are VAT
registered as the customer will not bear any of the extra bill
as it will be reclaimable, however if the customer base is not
VAT registered this will increase the cost of the service to
them.
I'm not sure about the rent being vatable as I have only ever
dealt with commercial (office) rental which does have VAT on
it. The rules may be different for private individuals. (Plus
our tax rules are slightly different in the IOM but still
similar)
I'm afraid it is not up to the yard owner whether they charge
VAT or not but I agree that a clever accountant could help the
yard out with saving themselves and customers on unnecessary
tax.
-- Posted by AlisonWoods on Oct. 2, 2001
Yes there is a threshold for having to be VAT registered
but you don't charge VAT on everything. A prime example
is children's clothes, there are VAT free which is why I buy children's jockey skull caps for riding and not the adult
version (the only difference being the Thelwell picture in the
lining). Rent is not Vatable likewise some feeds
are not VATable either. Services are VATable though
(which will cover mucking out, taking to and from field,
holding for vet/farrier etc).
We chatted to our livery yard owner (who was getting v close
to having to close) and armed with the above basic info, she
spoke to her accountant and her VAT bill was reduced from 3.5K
per quarter to £350. As I say the VAT regulation for
livery yards and riding schools is changing. With the new
regs she thinks her bill will be reduced again by almost half.
It will be well worth your livery owners while to spend the
money on speaking to an accountant - it really will be money
well worth spending.
-- Posted by Cob Nut on Oct. 2, 2001
So far as the issue of VAT on rent is concerned, I BELIEVE
(although I may be wrong) that the correct position is this. A
landlord may CHOOSE whether or not to charge VAT on the rent
(known as "the option to tax") BUT once the choice
has been made in respect of a certain piece of land, rent on
that land will be taxable for ever more. SO, over time, all
land (or all land which is let for commercial purposes, at any
rate) will eventually become VATable.
As I say, though, this is only my understanding, and it may be
a misunderstanding because I have very little to do with VAT.
(Tax men are actually very nice, but VAT is administered by
the OTHER nice taxing department!) So do not rely on what I
say without checking it out with somebody who DOES know about
it.
-- Posted by SaraG on Oct. 2, 2001
I think the point here is that the test case that Janet
refers to has shown that provision of livery services that are
linked to provision of a stable are now VAT exempt. In theory,
there is now no reason for livery owners to charge VAT,
though most will be very reluctant to do all the paperwork to
reclaim and then pay back VAT.
However, I suspect that Janet is right and many livery yards
do not know about this change - it is not that common
knowledge as Alison's answer shows - which describes the
position before this test case perfectly. HM Customs and
Excise are hardly going to make a big song and dance about it
if it means that their revenue will go down. I'm also
unsure of how a VAT registered livery yard would go about
changing their status - probably more paperwork.
Why not print off a copy of the article and take it along to
show to your livery owner? If s/he doesn't know about it, you
could suggest that it would be a good idea for her/him to talk
to their accountant. If they do know about it and aren't
prepared to do anything - it's then down to your powers of
persuasion.
-- Posted by Trezara on Oct. 2, 2001
Thanks for your replies!
The way I very basically understand it is that due to the case
of John Window v The Commissioners of Customs & Excise
(you can get it off lawtel), my riding horse who has her own
allocated stable can be exempt, if the owner of the yard chooses to do this, but my youngster who lives as part of the
'herd' with the yard owners horses, cannot as she does not
have her own allocated space.
I provided yard owners with copy of case, neatly highlighted
in places in addition to articles from Horse and Hound and she
said she would look into it.
I love this yard but the extra £100 a month is galling!
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