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VAT on land let out for grazing
Posted by Anonymous on Tue, 09/02/2010 - 15:14
Should we be charging VAT on land that is let out for grazing as we are/will be registered for VAT some of the land we are using for our own stock.
Thanks in advance
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No
Unless you have opted to tax it
Thanks
Thank you, I don't suppose you can point me in the right direction of the VAT ruling on this ???
What VAT ruling?
You are making a supply of land. Certain supplies are automatically standard- or zero-rated. This isn't one of them. It is an exempt supply unless you elect otherwise.
If it's the authority you want, then - Value Added Tax Act 1994 Sch 9 Group 1. If you need further guidance, then I suggest you speak to your tax adviser.
Try HMRC website as well
From memory VAT notice 742a may help.
Grazing is zero rated - it is the supply of animal feed (not rent!)
The supply of grazing is treated as the supply of animal feed and is therefore zero rated meaning that full recovery of VAT is allowed (eg. on mower and tractor costs, fencing costs, etc.) - so no need to opt to tax to get VAT recovery on related costs.
VAT notice 701/15 "Animals and Animal Food" at paragraph 9.6 refers.
It could become liable to VAT if it is part of a livery service.
PS. As part of the UK's tax complexity and keeping things like this secret HMRC's guidance on Land and Property (notice 742) is silent on the above rule! Not a very good situation as many people would regard grazing as being associated with Land & Property (ie. renting out a field) and therefore look in HMRC guidance under this label [Land] only to be misled in notice 742 being silent on "grazing".