VFOOD3550 - Items benefiting from the relief: seeds and plants: growing kits

Plant growing kits

Current policy on the liability of plant growing kits is found in Notice 701/38 (GOV.UK), Seeds and plants. A plant growing kit normally includes: seeds, growing medium, fertilizer, a plastic pot (or similar reusable container), together with an instruction leaflet.

Such kits are generally standard-rated regardless of whether the seeds are of a kind which would normally be zero-rated. This is because the single supply of seeds, fertiliser, growing medium, container and so on is not seen as falling within the wording of item 3.

However, a zero-rated supply may be allowed if the conditions specified in the notice are met.

Mushroom growing kits

The supply of a mushroom growing kit in a plastic bucket or similar reusable container may need to be apportioned between the zero- and standard-rated elements.

It is our position that, if a kit is supplied in a non-reusable container, the whole supply can be zero-rated, as the container is seen as normal and necessary packaging.

However, once the packaging is more substantial, designed to be re-used, you will need to consider the possibility of a single/mixed supply. We recommend that each case is judged on its own merits after consideration of the CPP principles (ECJ case 349/96), the Kimberley Clark case (CH/2002/APP/963, 2003 EWHC 1623) and the Cheshire Mushroom Farm (BIR/73/0025) tribunal.

In the VAT tribunal case of Cheshire Mushroom Farm, the tribunal permitted an apportionment between the standard-rated container and the zero-rated spawn and growing medium. In this particular case, the container was a reusable bucket and, because of the value of this and the other standard-rated items in the kit, the tribunal ruled that the particular circumstances of the case meant that an apportionment was necessary.