Expert advice on the recent VAT tribunal, which found that in some cases livery services are exempt from VAT

  • I’ve heard that livery services are now exempt from VAT. Is that right?

    AJ: No. Livery services, considered by themselves, are standard rated, and always have been so.

  • But in the John Window case the Tribunal said that livery services were exempt.

    AJ: Because in that case there were two servicesbeing supplied, stabling and livery, and on those facts the livery services were “ancillary” to the “main” service, which was the stabling.

  • So the “main” supply of stabling was exempt. Why was this?

    AJ: The supply of stabling allowedthe owner a specific part of the stables in which to keep the horse. That was a supply of a right over land.

  • And a right over land is exempt?

    AJ: Yes, unless the supplier has “opted to tax” the land (in which case, the supply of stabling would be standard rated).

  • You said that in the John Window case the livery supplies were “ancillary” to the “main supply”? What does that mean?

    AJ: Usually, a supply is “ancillary” to another supply if the customer does not regard it as an end in itself; the ancillary supply is only there “for the better enjoyment” of the main supply.

  • So Mr Window was supplying stabling, with the livery services as just something “for the better enjoyment” of that?

    AJ: Yes,that is what the Tribunal found.

  • And if I’m still unsure about how all these rules apply to me?

    AJ: Take good advice from an accountant who really understands your business – and who knows about VAT!

  • Anne Jepson FCA can be contacted on (tel: 0115 9555500); or via e-mail: anne.jepson@rapkcj.co.uk

    Read the full report in this week’s Horse & Hound (14 February 2002), or click here to subscribe.

  • Click here to read about the John Window tribunal case.
  • Click here forexpert advice to running a livery yard.