Food For Working Dogs Is Exempt For Vat
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Published originally 8 October 2014
basic principles of VAT include the fact that the sale of food is
whilst the supply of pet food is, in contrast, standard-rated. That is
serious difference for the purposes of commerciality for both the
supplier - in
terms of profitability - and the consumer - in terms of cost.
recent Upper Tribunal (UT) decision (Roger Skinner Limited) confirmed
decision of the First-tier Tribunal (FTT) that in the case in question
feeding stuffs” were being supplied and they were therefore zero rated.
are similarities to the “jaffa cake” debate on whether this was “food
Skinner Limited sold dog food that had been formulated for working dogs
ultimately, also suitable for pets. The company claimed that the
should be zero-rated for VAT on the basis that they qualified under
Sch 8 group 1 as “animal feeding stuffs”. Under section 30 of the VATA,
supply of goods or services is zero-rated for VAT purposes if the goods
services are of a description specified in schedule 8 to the Act.
However, Group 1 contains a
list of “Excepted
items” which are standard-rated unless also found in a list of “Items
overriding the exceptions”. The “excepted items” include these, at
foods, canned, packaged or prepared: packaged foods (not
being pet foods)
for birds other than poultry or game; and biscuits and meals
for cats and dogs”
added in each case).
the past, HMRC maintained that all canned or packaged food for dogs was
standard-rated for VAT purposes.
Therefore, HMRC disputed the claim by Roger Skinner
Limited for zero-rating
of its products, instead stating the goods were pet food and therefore
within the exception at item number 6, and thus should be standard
rated. The company
thus took the case to the First-tier
FTT allowed the taxpayer’s appeal, so, in turn, HMRC appealed to the
Tribunal. The basis of the argument put before the original tribunal
the fact that while the food was also suitable for pet dogs, the
not necessarily specifically pet food. The Upper Tribunal noted that
position also depended on marketing and the customer base. In light of
evidence, the Upper Tribunal found that the FTT had been entitled to
the goods were aimed at working dogs and therefore zero-rated correctly
line with tax regulations.
the particular point that the food was “meal” for working dogs – as
in the exception of the VATA 1994 at item number 6 – the judge of the
Tribunal agreed with the FTT that the food in this instance was used as
and was not a complete meal in itself. The question on which this case
therefore whether the foods were either “pet foods” or a separate part
of a “meal”
for dogs within the meaning of the schedule.
appeal was thus dismissed and the dog food produced by Roger Skinner
deemed zero-rated – CRC v R Skinner,
Upper Tribunal (Tax and Chancery Division), 15 May 2014. It
is important to
note that the food was first a mixer for working dogs and secondly
towards working dogs, separating this product from generic ‘pet food’,
difference could clearly be demonstrated by the taxpayer. Mr Skinner’s
was to advertise his company’s products by visiting gun dog breeders
trainers; as well as exhibiting at field trials and country shows,
and focusing on this particular market sector. The company was
some 12-15 events a year, and Crufts, which was not attended very
the only one of the events to include sections for pets. Skinner also
advertised specifically in working dog magazines. The company
not place advertisements in magazines concerned with show dogs or in
pet dog magazines. Sales representatives were told to hold the food out
suitable for all dogs, but also primarily to stress the products’
for gun dogs.
is no doubt the dog food industry, especially the working dog sector,
promote the zero-rated factor where possible, in light of the result in
recent case. For all those involved in the industry it is essential to
that the correct rate of VAT is being applied for commercial reasons,
interested parties must remember to clearly establish direct evidence
support any claims to zero rate taxable supplies for VAT.
About the Author
Supplied by Julie Butler F.C.A.
Butler & Co, Bennett House, The
Dean, Alresford, Hampshire, SO24 9BH.
01962 735544. Email;
email@example.com, Website; www.butler-co.co.uk
F.C.A. is the author of Tax Planning for Farm and Land
Professional), Equine Tax Planning
ISBN: 0406966540, and Stanley: Taxation
of Farmers and Landowners (LexisNexis).
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Article Published/Sorted/Amended on Scopulus 2015-05-20 09:00:49 in Tax Articles