VAT relief?

[Ros]

Can anyone help?We have a registered holding and are building up our herd of dexters.
Is it possible for us to become VAT registered and thus avoid paying VAT on a new cattle trailer etc we hope to buy in the near future.Would be grateful for any advice on this, Ros

[Duncan MacIntyre]

Have a look at http://www.hmrc.gov.uk/vat/index.htm for proper info on VAT. You must register if your annual turnover is over a certain limit, unlikely to be the case for a smallholding, but you can register voluntarily under the limit as far as I remember. Then you have to keep good account records and submit a return, for me it is every 3 months, land there a re various schemes on whether you account for invoices as issued and received or on a "cash basis" by which they mean as you actually receive payment or make payment. You will not get relief as such but if you pay more vat in a return period than you draw in, then you will have a repayment. Most farm businesses will be getting repayments, whereas a vet like myself is always sending them money - but I never moan about it because a big VAT payment means we have done a lot of business.

Thins to watch are assumptions on HMRC part for private and business usage - there are set scales used for example for vehicle fuel if the vehicle is used both for private and business use, and if your business use is small then you may lose out.

All very complicated.

Duncan

[Broomcroft]

I don't know what the rules are now, but 6 years ago we registered for VAT before we reached any turnover figures, in fact before we had no turnover at all. But it has to be on the basis that you are or are going to be a bone-fide business. On our first claim which was for the VAT to be repaid on a couple of vehicles and lots of equipment, we had a visit from the vat inspector.

He came to see if we were just registered to get some money back or whether we were really in business. We have a full-scale farm, so even though it wasn't stocked at the time, it was obvious that we were in it for business reasons and were just setting up.

So if you are actually in business and intend reaching their target figure (which was £50-70,000 p.a. when we did it), then you are OK but need to do accounts etc as Duncan says, and all the apportionment of costs. We have a bookkeeper one day a month because it does my head in



Edited By Broomcroft on 1265461912

[moomin]

I registered when we had a small holding and the criteria for voluntary registration was that you would not be able to compete on sales with similar businesses if you had to charge your customers a premium to cover your vat inputs. i.e. you would have to charge a higher price for your Dexter meat than someone who is registered [meat is zero rated] and this would be unfair and detrimental to your business. Are you a member of the NFU? they would help with this.
Di

[clacko]

i registered last sept and also got a year back dated to sept 08 purley to cover costs of trailer, truck and some some other bigger purchases, i have no income from my stock as i am a "new herd" which i explained and i also told them i would expect very little income in the next two years, done all this online with no problems at all,
paul

[Ros]

Avery many thanks for the very helpful replies which we will obviously act upon.
We're about to buy a trailer so hopefully will save us a lot of money.
Thanks again,this is such a great site and goes a long way to restoring our faith in human nature!!!

[Saffy]

If you are about to buy a trailer - (we have horses or ponies as well as well as cows and sheep) - it is worth getting a good horse trailer and altering to suit the needs of all livestock. Cheaper than having two trailers and takes up less space.

We bought a horse trailer a while back as I have horses, we knew we wanted to transport cows and sheep as well and would therefore need gates etc. However Chris is a carpenter and he added them and made some dividers for different animals. He says it isn't difficult, that DIY skills will do the trick.

I can email or PM a very basic plan he has done of the gates if anyone wants one.

The trailer has a metal floor for ease of washing after farm stock and we have removable rubber matting for the horses.

It is amusing when we arrive at a show or the like - apparently with a horse trailer, we have had dirty looks from official types, that are about to tell us off for not having gates - one nice gentleman even began to say you really shouldn't transport without gates, when we droppped the tailboard and he saw the gates. He was very impressed with the idea when he saw it!

Stephanie

[Broomcroft]

I'm not sure that what I said about reaching their target figure is correct. That's what I was told many years ago.

[Ros]

Thank you all for your helpful advice-we are now VAT registered !We now need to learn how to do VAT returns!!Ros