VAT and the Smallholder

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VAT and the Smallholder

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dirtyden

Joined: 03 Aug 2006
Posts: 14
Location: Weybread, Suffolk.

Posted: Fri Aug 04, 06 9:58 am Post subject: VAT and the Smallholder
Is it worth registering a 5 acre smallholding for VAT ? What are the requirements ? What can I claim back on ? Any hints, tips, advice, advantages, disadvantages etc ?

tahir

Joined: 28 Oct 2004
Posts: 45434
Location: Essex

Posted: Fri Aug 04, 06 10:02 am Post subject:
www.hmrc.gov.uk should have a section on vat registration. Its easier for a small business nowadays but there are turnover limits. On 5 acres I can't see that you'd be turning over enough to be registered.

Gervase

Joined: 17 Nov 2004
Posts: 8655

Posted: Fri Aug 04, 06 11:31 am Post subject:
You can voluntarily register, even if your turnover is below £67K. It may be worthwhile for a smallholding, even though feed and the like is only rated at 5 per cent.

Rob R

Joined: 28 Oct 2004
Posts: 31902
Location: York

Posted: Fri Aug 04, 06 4:54 pm Post subject:

You can claim on everything you use for carrying out business, you can't claim on personal expense & of course you have to charge VAT on sales at the current rate.

Gervase wrote:

You can voluntarily register, even if your turnover is below £67K. It may be worthwhile for a smallholding, even though feed and the like is only rated at 5 per cent.

Feedstuffs are zero rated. Straw for feed has no VAT, straw for bedding does

- there is a lot of feed straw sold in the UK

It depends on the individual wether it is worthwhile, but most farms register because a lot of their inputs include VAT, but a lot of their outputs don't, and food has always been zero rated (with a few exceptions, just to catch you out).

Best thing to do would be to analyse your accounts over the past year & calculate how much VAT you pay out, then take away the extra VAT you would be obliged to charge on anything sold & the difference will tell you if it's worthwhile or not.

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