VAT SCHEME for Second Hand Horses & Ponies
BETA, were instrumental in winning the right for dealers to utilise the same sort of margin scheme accessed by sellers of other second hand goods, from antiques to cars.
This scheme is also called the Margin Scheme, and full details are available from HM Customs and Excise in Notice 718.
Businesses buying and selling goods can usually recover the VAT they are charged on their stock as input tax. But if, as is often the case with horses, you obtain most of your stock from members of the public who are not VAT registered, you will have no VAT to recover. The Margin Scheme means that you still charge VAT but only on the value you add to the goods. By calculating VAT on the margin, the scheme avoids double taxation and allows to you trade on a more competitive basis with non-VAT registered sellers.
Horses and ponies which you have bred and are selling for the first time are not second hand. You cannot use the scheme for any horse or pony that you have bought on an invoice which shows VAT separately.
To qualify to use the scheme you must keep Margin scheme records and accounts. As an alternative and to make the process easier, you can use special three part forms in numbered sets that are only available from the British Equestrian Trade Association.
One form should be used for each horse or pony you sell or intend to sell under the scheme. If you use the three-part form these are the only stock and sales records you need to keep for the purposes of the Margin scheme. You do not need to keep a stock book or invoices as described in the regulations.
If interested in utilising the scheme and purchasing the forms from BETA, click here to download a price list and order form.
Full details of the scheme are accessible from HM Customs.