Livery yards are being urged not to miss out on a windfall after a change in UK tax law.

VAT that was paid by stables to Her Majesty’s Revenue and Customs (HMRC) on stabling charges for the 23-year period between 1973 and 1996 may now be retrievable.

A landmark legal case won in the House of Lords in January by publisher Condé Nast means businesses can delve back into their accounts to claim VAT costs paid.

Prior to the case, HMRC had only allowed businesses to go back three years from 2001 to reclaim VAT.

Livery yards paid VAT from 1973 until 2001, when tax exemption status was introduced for stabling services and riding lessons (when given by the owner or partner in the business).

The window for making a new claim lasts until March 2009 and tax experts are urging livery yard businesses to contact their accountants immediately.

Peter Smallwood, VAT partner at HW Accountants in Leeds, said: “This could amount to millions of pounds when you look at established stables across the country.

“This affects lots of people from car dealers to caterers.”

June Beilenshohn, owner of Halsall Riding and Livery Centre, Ormskirk, Lancashire said she would be filing a claim.

“We think this is a great opportunity for riding schools like ours and we’ll be working to try to secure monies that we feel we’re owed,” she said.

But as HMRC is likely to contest many claims, livery yards are advised to engage an experienced VAT accountant.

Daniel Lyons of Deloitte in Bristol, said: “Livery yards should consider the possibility of making a claim for overpaid VAT on stabling and livery, but should bear in mind that HMRC is likely to resist such claims, particularly if it can be argued that the VAT cost was passed on to the customer.”

For more information go to http://www.hmrc.gov.uk/briefs/vat/brief0708.htm

This news story was first published in Horse & Hound (5 June ’08), which includes further advice on how to go about claiming the VAT back