Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Farm and consultancy

14 July 2015
Issue: 4509 / Categories: Forum & Feedback , Business , Partnerships , VAT

Should a VAT-registered farmer charge VAT on unrelated consultancy work?

My client is a small sole trader business. He is registered for VAT and the VAT certificate describes the business as “mixed farming”.

The client has recently sold his 50% stake in a separate company. As part of the sale agreement he has been providing consultancy services on a self-employed basis to the new company owner. My client has not charged VAT on these services which I believe to be an error.

HMRC have told my client that he does not need to charge VAT on the consultancy service and that his treatment of his invoices was correct.

My understanding is that the client is VAT-registered as an individual and should charge VAT on all his trading activities. Who is correct?

I understand that the customer my client is providing the consultancy service to cannot fully claim input tax. Consequently if VAT is payable on the income ...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

back to top icon