Tax treatment of horse liveries

A client approached me recently with what they assumed was a simple question: what is the VAT treatment of horse liveries? If only there was a simple answer.

Horse liveries are a very complex area of VAT. Within the one livery yard there can be three different rates of VAT charged on a variety of liveries:

• Zero: Grass livery.
• Exempt: Supply of a stable with little additional services.
• Standard 20%: Supply of serviced liveries which can be part or full livery.

So which is it?

Generally speaking the question that has to be asked is what is the principal supply being offered and why has the livery customer come to your yard? If the principal supply is the stable then an exempt right of land applies and the livery can be exempt. If the services go beyond this then it is standard rated. Similarly for a...