14 February 2002
Expert advice on the recent VAT tribunal, which found that in some cases livery services are exempt from VAT
I’ve heard that livery services are now exempt from VAT. Is that right?
AJ: No. Livery services, considered by themselves, are standard rated, and always have been so.
But in the John Window case the Tribunal said that livery services were exempt.
AJ: Because in that case there were two servicesbeing supplied, stabling and livery, and on those facts the livery services were “ancillary” to the “main” service, which was the stabling.
So the “main” supply of stabling was exempt. Why was this?
AJ: The supply of stabling allowedthe owner a specific part of the stables in which to keep the horse. That was a supply of a right over land.
And a right over land is exempt?
AJ: Yes, unless the supplier has “opted to tax” the land (in which case, the supply of stabling would be standard rated).
You said that in the John Window case the livery supplies were “ancillary” to the “main supply”? What does that mean?
AJ: Usually, a supply is “ancillary” to another supply if the customer does not regard it as an end in itself; the ancillary supply is only there “for the better enjoyment” of the main supply.
So Mr Window was supplying stabling, with the livery services as just something “for the better enjoyment” of that?
AJ: Yes,that is what the Tribunal found.
And if I’m still unsure about how all these rules apply to me?
AJ: Take good advice from an accountant who really understands your business – and who knows about VAT!
Anne Jepson FCA can be contacted on (tel: 0115 9555500); or via e-mail: anne.jepson@rapkcj.co.uk
Read the full report in this week’s Horse & Hound (14 February 2002), or click here to subscribe.
Click here to read about the John Window tribunal case.
Click here forexpert advice to running a livery yard.
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