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Sheep farmers selling wool urged to be careful of hidden VAT

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The VAT People - Expert Author

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28th May 2013

As the sheep shearing season commences, NFU Cymru has urged farmers to be cautious when selling wool outside the British Wool Marketing Board scheme, as there could be a hidden VAT charge.

When selling wool the livestock owner may well be liable to an unexpected VAT charge if the wool does not leave the UK within prescribed time limits. The wool is still eligible to be zero-rated for VAT purposes as long as it leaves the UK within three months of the sale, but it is important that the farmer retains the correct documentation and actually know if the wool has been exported. If not VAT is due on the sale.

Rob McCann, a director of The VAT People, said “By ensuring they play within the rules laid down by HMRC, farmers can protect themselves from the potential for fines and interest payments if HMRC were later to discover the wool hadn’t been exported.”

“Some simple steps like taking the customers VAT number and the full delivery address and quoting both of these on the invoice can help ensure that any investigation is not too time consuming or frustrating. Any correspondence showing that the goods have left the UK within three months is hugely important in defending your position”

If you have clients for whom this may be an issue, either this year or who have potentially unresolved issues from prior years, give us a call  for a free initial consultation. A pre-review inspections to help ease any problems that may exist for clients.


About the Author

The VAT People are leading VAT and Customs Duty consultants based in the North West of England. We work with a wide range of businesses throughout the UK as well as assisting our accountancy colleagues to unravel the thorny VAT issues for their clients. We are one of the UK's largest and most comprehensive sources of VAT and Customs advice, our consultancy team having over 140 years of experience in VAT and Customs gained in either HMRC or a Big 4 accountancy practice environment.

Call us on our VAT helpline 0800 077 4604 to discuss. All initial discussions are free with no-obligation.



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Article Published/Sorted/Amended on Scopulus 2013-06-07 09:10:14 in Tax Articles

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