27 February 2015 | Online since 2003



23 November 2012|Finance,Housing and Storage,News

Farmers could face extra tax bills over new storage rules


The introduction of new VAT rules on self-storage could see farmers face extra tax bills according to agricultural accountants.

New rules introduced from October 1 saw 20% VAT charged on self-storage – the letting of space to a third party in which to store their own goods. Previously self-storage was exempt from VAT.

"On the face of it the new rules did not affect the agricultural sector, however it now seems likely that they will have a serious effect on farmers who store items, such as surplus equipment for a neighbouring farm or business in a redundant building" said Paul Laird of Fish Partnership.

The storing of livestock is exempt from VAT, even if a farmer is “storing” livestock for a third party, this includes livery.

If space is used for a dual purpose, but includes self-storage, then VAT treatment follows the primary part of the supply. I.e. if the main purpose of the space if for self storage, the supply is 20% VAT rated.

"Previously a farmer’s income from self-storage had been exempt from VAT, however from 1 October, 20 per cent needs to be added to the charge or the charge is deemed to be VAT inclusive, potentially leaving that farmer out of pocket."

Paul also warned about implications if someone had been billed for self storage and the invoice straddled the 1 October date.

“If an invoice was raised after 21 March 2012, VAT needs to be charged on the part of the invoice covering the period after 1 October, if it was before this date there is no charge,” he said.

“However, if the farmer cannot charge the extra, they will be left bearing the VAT themselves.”

Farmers should also be wary of other issues that may affect the VAT rating.

If there are gaps between the time the space is used, the supply remains 20% rated, if there is intention from the third party to use the building again. If there is a change in use, this will be reflected in the VAT treatment.

Paul added: “VAT rules are notoriously complex, which is why farmers should seek advice now, particularly those who haven’t applied VAT on self-storage from 1 October.

“Many farmers could be caught out by this new ruling, and potentially face damaging penalties.”

Download



Comments


No comments posted yet. Be the first to post a comment

To post comment without approval login or register

Display name

Please enter your name

Email (optional)
Comment

Please enter your comment

Post Comment

Your comment submitted successfully.Please wait for admin approval.

Some error on your process.Please try one more time.



Jobs


19 February 2015
Care Assistant - Redcar/Guisborough
Carbury House, Concorde Way, Preston Farm Business Park, Stockton on Tees, TS18 .Company Registration Number:. Enable Care Pe...

24 February 2015
Senior Research Associate (Ubicomp)
Senior Research Associate (Ubicomp) Ref D1698R Faculty/Services Science, Agriculture & Engineering Department School of Compu...

9 February 2015
Class 2 Driver
Mortons Dairies Ltd. Morton's Dairies require a Class 2 Driver for an immediate start, to work from our depot @ Maghull....

11 February 2015
Apprentice Dairy Farm Hand
NVQ Level 2 in Agriculture. On the job training plus weekly College attendance working towards the Work Based Diploma in Agri...

12 February 2015
Application Developer - ALM
IIS Web Farm. Application Developer- Application Lifecycle Management, Shell Scripting, C#, .Net - Swindon commutable from;.....




Top stories you may have missed
2 February 2015 | Arable
Is EU membership damaging UK farming?

Is EU membership damaging UK farming?

Membership of the EU is damaging the British farming industry, according to...


29 January 2015 | Machinery and Equipment
Drones 'rapidly changing' agriculture

Drones 'rapidly changing' agriculture

BASIS has launched an accreditation for pilots of Unmanned Aerial Systems (...


23 January 2015 | Arable
UK wheat yields have potential to double

UK wheat yields have potential to double

UK wheat yields have theoretical potential to more than double over the nex...


23 January 2015 | Machinery and Equipment
Crowds flock to LAMMA 2015

Crowds flock to LAMMA 2015

Britain’s farmers flocked to Peterborough for the first day of LAMMA’15 to ...


22 January 2015 | Cattle
Don't blame supermarkets for milk crisis...

Don't blame supermarkets for milk crisis...

The crisis in the dairy industry is not the fault of supermarkets, accordin...


16 January 2015 | CLA
Families affected by HS2 face 'major wor...

Families affected by HS2 face 'major wor...

Transport Minister Baroness Kramer visited three rural businesses in Cheshi...


16 January 2015 | Machinery and Equipment
John Deere unveil new 6R tractor range

John Deere unveil new 6R tractor range

Spearheading the John Deere range of mid-size tractors from Mannheim, the n...


14 January 2015 | Animal Health
Monthly TB checks more effective than ba...

Monthly TB checks more effective than ba...

Regular testing for bovine TB could significantly reduce the number of infe...


12 January 2015 | News
Government regulations hampering UK agri...

Government regulations hampering UK agri...

Single-issue policy-making threatens to hamper, not help, the progress of U...


8 January 2015 | Cattle
2015: The year ahead for the beef market

2015: The year ahead for the beef market

2014 has been a “rocky old year” for the beef industry but better prices ar...