If you can separate out the private shoot element, run for recreational purposes, then you are not running a business for VAT purposes and therefore do not charge VAT as private members of a shooting club are merely sharing the costs. In this situation, you must remember that you cannot reclaim any part of the input VAT incurred in connection with the shoot.
Sports clubs
Sports Clubs are treated as VAT exempt and must be not-for-profit, and free from the commercial influences. Therefore, if you rely on commercial days to bolster the shoot club funds, you may not qualify for the exemption. The exemption is there to encourage individual members to take part in the sport, and so many friends becoming members of their own club and therefore taking advantage of the exemption. However, the conditions are surrounded by very complex anti-avoidance provisions.
The basic rules are as follows:-
Barter
HMRC states that where a landowner grants shooting rights to a syndicate in return for free or reduced-price shooting there is a barter transaction in the form of a taxable supply in return for a consideration received. This is up for debate, especially since some shooting is uneconomic and carried on for purely sporting or social reasons and to encourage the biodiversity of the countryside, and would only be the case where the landowner grants the rights in the course of his business. VAT would be chargeable on the deemed value of the shooting supplied.
Parallel shoots
There is confusion where a private shoot runs alongside a commercial shoot. Where this is the case, the landowner or shoot operator needs to reduce the scope for misunderstanding as much as possible. Zero-rated pheasants in a tribunal case (N C Carter) it was accepted that the sale of poults was zero-rated in circumstances where the mature birds were ‘collected’ some months later. Some shoot operators have tried to implement their own version of this to produce a VAT saving. It is a complex area, and professional advice is recommended for each individual situation.
Syndicates and private shoots
It has long been established that where a landowner invites family and friends to shoot there is no business activity. Syndicates operate in much the same way, sharing costs rather than making supplies by way of business. Thus, VAT law relieves shooting from the tax where it is carried on privately and where it is provided by Members’ Clubs. This would cover you and a group of friends having a non-commercial shoot where they contribute towards the costs and no profit is made.
VAT law with regards to shooting is outdated and needs to be rewritten, with areas of doubt and uncertainty clarified. VAT officers locally and at policy-making level seem to have only limited understanding of the social, biodiversity and economic context which surrounds shooting, and too often it seems that landowners and shoot operators are treated unsympathetically by VAT officers who have just one item on their agenda.
It is simplest to charge the VAT (but not necessarily right) unless you are clear that you are covered under the syndicate and private shoot category. Please seek professional guidance if you are unsure of the position regarding your shoot.
To discuss any issues highlighted in this blog post, please get in touch with your local rural UHY adviser, complete our online contact form or contact Charles Homan, the author of this blog. Alternatively, please click here to read more on the rural and agricultural services we provide.
