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Hazlewoods Agriculture team update – Shooting syndicates - Is VAT an issue?

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12 November 2012

Many farmers and landowners are involved in shooting syndicates.  Such syndicates may shoot over land farmed by individuals involved in the syndicate, or over land farmed by unconnected parties.

VAT considerations

There is no general rule that all shooting syndicates are VAT free.  The VAT treatment of each syndicate will be decided on its own facts.  Where a group of individuals get together to form a shooting syndicate, and contribute to cover the costs of that syndicate, this should not result in any unintended VAT liabilities being incurred.  This will be the case whether the syndicate shoots over land owned by one or more of the syndicate members, or owned by unconnected parties.

Where a syndicate provides “let” days then this could be seen by HM Revenue & Customs as converting the entire syndicate activity into a “business”, including the supplies made to its members. Therefore, where let days are provided, the level of income from all supplies made should be monitored carefully to ensure that this does not exceed the VAT threshold of (currently) £77,000 during any “rolling” 12 month period.  This should include an imputed value for days supplied to members of the syndicate.

Where a landowner grants shooting rights to a syndicate in return for the provision of a number of days shooting, this should not be regarded as let days by the syndicate, but should be regarded as consideration given by the syndicate. If registered for VAT, the landowner must account for VAT on the open market value of the rights.

Going forward

There is no general rule that all shooting syndicates are VAT free. The VAT treatment of each syndicate will be decided on its own facts. The way that a syndicate is structured may result in an unintended VAT liability being incurred. Therefore, all syndicates should regularly review their structure, and the number of let days provided, to ensure that it does not result in unintended VAT liabilities.

If you would like to discuss potential VAT issues please contact Adam Lloyd or Julian Millinchamp on 01242 237661.

If you would like to discuss tax planning issues generally please contact Nick Dee or Peter Griffiths on 01242 680000.