STABLES, YARDS, ARENAS AND PADDOCKS standard-rated stabling) and charges need to be appropriately apportioned. • The supply of ‘keep’ (or care or livery services) including stabling and feed is one standard-rated supply with no apportionment. The receipt of such income will also be potentially liable for income tax and should be reported on the tax return of the appropriate individual or business, and there may also be inheritance tax implications. Nick Hart says: or many people, owning and the provision of livery, where apportioned. Where there is “Where land is let to others to a horse or pony is no there may be more complex tax ‘keep’ also then this is a single graze their horses, this income supply that is standard-rated different to owning a implications. with no apportionment. HMRC is will potentially be liable to boat or a classic car for Nick Hart, VAT Director, Saffery income tax. This may not often interested in land-related personal use or enjoyment, Champness, and a member of supplies where other services are increase your income tax burden with no taxation the firm’s Landed Estates and consequences. Rural Business Group comments: also being provided and stabling significantly, but it may impact on other arrangements such as and livery is no exception. But it is an expensive business. A “The VAT position for livery inheritance tax, particularly if the 2019 survey by the British businesses is determined on the Should HMRC become aware that the customer receives other land is let or used as part of an Equestrian Trade Association facts of each case, addressing agricultural holding. benefits along with the land, (BETA) cited the average spend both contracts with customers they would generally be quick to “Such property would normally on livery at £221/month, and and the balance of services. suggest the service should all be be fully relievable for inheritance the cost of grazing only for a These could cover grazing, tax, but only if the property is hardy pony at around stabling and ‘keep’ for example. standard-rated.” £125/month. More recently, “Grazing rights on their own can Due to the complexities and to a used for agricultural purposes. Grazing by cattle or sheep would Money Saving Expert in its be zero-rated (0% VAT) as animal degree HMRC’s sometimes enable the land to qualify, but it survey of spend on ‘pets’ feed, and stabling can be exempt uncertain position, those supplying ‘keep’ should maintain is unlikely that horses grazing highlighted keeping a horse as from VAT, but standard-rated the land would. Be warned records for feedstuffs and unthe most expensive. Its August (currently 20%) if the stables in 2021 poll found that 25% of their own right have been ‘opted opted stabling, in case there is an therefore that a little extra income now might add up to a opportunity in the future to respondents owning horses to tax’ or are part of a larger costly capital tax bill in the reclaim VAT overpaid on these. spent over £5,000/annum on holding that has been, while future.” Broadly, the VAT position for them with 42% spending ‘keep’ or ‘care’ is also a supply those providing stabling, grazing Nick Hart adds: “The system is between £2,001 and subject to the standard rate of complex and there are a number or livery is as follows: £5,000/annum. VAT. of anomalies within it. We would • The letting of a stable alone is That would appear to make “The possibilities are complex therefore urge anyone with exempt from VAT, subject to livery and the letting of loose and HMRC guidance is not concerns about VAT or income the ‘option to tax’. boxes and grazing an attractive always clear. For example, for DIY tax in relation to equestrian • Stabling plus livery might be proposition for land owners or livery, where there are elements issues to speak to their VAT exempt, only if the farmers looking for an additional of stabling and grazing but no professional adviser.” stabling is the predominant income stream. But these can be ‘keep’, the official view has been www.saffery.com element. problem areas for tax. There is a that there are two separate • DIY livery is two supplies (of fine line between having one or a supplies at different VAT rates zero-rated feed and exempt or few spare loose boxes to rent and the consideration can be
BEWARE THE TAX IMPLICATIONS OF
HORSES & LIVERY
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