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HMRC internal manual

VAT Agricultural Flat Rate Scheme

Appendices: Designated activities covered by the flat rate scheme

VATAFRS1500 explains the context of this page.

The headings in capitals and bold below are taken from the Value Added Tax (Flat Rate Scheme for Farmers) (Designated Activities) Order 1992. The headings describe the designated activities covered by the scheme. Below each, you will find guidance on the scope of each activity. You can request further guidance on designated activities from VRAP team if required.


1. General agriculture, including viticulture

This covers all crops including turf and reeds grown as a crop, for example thatching, but not peat or topsoil. It also includes the growing of grape vines and the production by vineyards of their own wine, up to and including the sale of the wine.

2. Growing of fruit and of vegetables, flowers and ornamental plants, whether in the open or under glass

This includes flowers, bulbs and tubers, cut flowers, branches, foliage and plants, which were seeded elsewhere but have been bought by flat rate farmers to grow into mature plants for sale.

The heading also includes the sale of these products by farmers who allow members of the public to come onto their farms to pick produce to buy (pick-your-own). If farmers sell produce in their own farm shop that has undergone no further process than being harvested, cut and put into containers on the premises, this activity qualifies under the above heading. Remember the flat rate addition can only be charged when the produce is sold to a VAT registered person.

3. Production of mushrooms, spices, seed and propagating materials; nurseries

Production of propagating materials is taken to mean the production of multiple specimens of plants by natural process from parent stock - for example growing of seedlings.

Nursery production covers the rearing of young plants ranging from tomatoes, vegetables and fruit, to trees and shrubs for sale.


1. General stock farming

There will be no definitive list of animals falling under this heading, but it includes the breeding, rearing and care of animals falling within the following categories:

  1. those animals which are eaten by humans;
  2. those animals which are not eaten by humans but produce food which is eaten by humans;
  3. those animals which are not eaten by humans but are eaten by other animals;
  4. those animals which are not eaten by humans or animals but which are farmed for their skin, fur or wool; and
  5. any animal specifically used in connection with agricultural production activities or services falling within the flat rate scheme but not covered by the categories above, for example sheepdogs.

Stock farming includes the breeding, rearing and care of animals ranging from normal farm animals - for example cattle, pigs, sheep, horses and poultry - to mink, game birds (except where they are raised specifically for shooting), pigeons, deer, and ostriches (where they are raised for food or solely for the sale of their feathers). Most other activities involving animals for example, pony trekking, riding lessons, off-course riding, hunting with horses or hounds etc. are excluded.

Animals excluded from the scheme: Although not an exhaustive list, the following types of animals are excluded from the scheme: budgerigars and other birds raised in aviaries purely as pets or for show, cats, dogs (except sheepdogs), butterflies, any other animal bred or raised as a pet. When deciding whether an animal can be included in the scheme, consider whether it falls into any of the categories a to e listed above.

Training of animals: The preparation of animals for showing at agricultural shows and the showing of the animals themselves will fall within the scheme. Training as a specialist activity is a non-agricultural supply falling outside the scheme.

Training of horses bred for racing: Horses which leave breeders to be trained by a specialist trainer will be considered to have left the flat rate scheme when they enter the trainer’s yard. Training is a single standard rated supply of services. Where horses are bred, reared and trained for racing on the same premises (permit holders), once the horses are put into training the training activity will fall outside the flat rate scheme.

Training of horses bred for activities other than racing: When horses and ponies enter specialist training such as show-jumping, eventing, dressage and riding lessons for particular work - for example as a dray horse - they will fall outside the scheme. For the purposes of the scheme, the breeding, rearing and care of such horses will be considered to run until the end of the year (31 December) in which the animal becomes 4 years old. Any specialist training that horses undergo from this point will fall outside the scheme.

2. Poultry farming

This covers the breeding and rearing of poultry generally eaten by humans and / or animals. This will cover hens, cocks, cockerels, pullets, chicks, ducks, geese and turkeys, for example. It will also include pigeons and game birds, but not where they are raised specifically for shooting.

3. Rabbit farming

This covers the breeding and rearing of all breeds of rabbit including those generally eaten by humans and / or animals. It excludes rabbits bred specifically for shooting.

4. Bee-keeping

This will include the breeding, rearing and care of a flat rate farmer’s beehives up to and including the sale of the bees.

5. Silkworm farming

This will cover the breeding and rearing of silkworms up to and including the sale of silkworm cocoons.

6. Snail farming

This will cover the breeding and rearing of edible snails and those reared for any other purposes.


1. Growing, felling and general husbandry of trees in a forest, wood or copse

This will cover the growing and sale of all kinds of trees within a flat rate farmer’s own woodland / forest and activities carried out within that area by themselves and / or their employees using the farmer’s machinery. This includes:

  • growing of trees and their sale either standing or felled; and
  • conversion of felled timber into saw-logs, industrial small diameter round-wood, pit-props, cordwood, fencing material and firewood.

It excludes any processing beyond this stage.


1. Fresh-water fishing

2. Fish farming

This includes any fish which are farmed, for example koi carp, not just those which are eaten by humans and/or animals.

3. Breeding of mussels, oysters and other molluscs and crustaceans

4. Frog farming


1. The processing by a person of products deriving from his activities falling within Parts I to IV above, using only such means as are normally employed in the course of such activities

This covers the processing by flat rate farmers of their own agricultural products using their own labour and machinery (for example gutting of fish, drying of hops etc.). It includes the slaughter and preparation of animals raised by flat rate farmers for sale at the farm gate and the picking and packaging of fruit for sale on the farm. It also includes the sale of honey by a bee farmer.


Important Note: Services provided by farmers will only qualify for the scheme if the farmer also carries out at least one of the production activities listed in Parts I to IV.

1. Field work, reaping and mowing, threshing, baling, collecting, harvesting, sowing and planting

This includes the hedging and mowing of set-aside land.

2. Packing and preparing for market (including drying, cleaning, grinding, disinfecting and ensilaging) of agricultural products for market

3. Storage of agricultural products

This includes the storage of products produced by other farmers but does not include any processing of such products.

4. Stock minding, rearing and fattening

This covers the animals which fall under the headings of stock farming and fisheries.

5. Hiring out of equipment for use in any of the activities described in this Schedule

This only covers equipment used by flat rate farmers in carrying out their other designated activities. The hiring out of equipment qualifies whether or not the farmer or his employees are also hired to operate the equipment.

6. Technical assistance in relation to any of the activities described in this Schedule

This covers advice or specific assistance in connection with any of the designated activities in Parts I to V and any of the other services in Part VI. It includes thatching if the farmer has grown the reeds. It also includes deer management (for example, culling and preventing deer from going onto forestry land), vermin control and agricultural pest control.

It does not cover a producer of wine who provides services of crushing grapes, bottling, labelling etc. for small wine producers and then returns the wine to the producers. It also does not cover assistance in relation to any activity falling outside the designated activities of the scheme.

7. Destruction of weeds and pests, dusting and spraying of crops and land

8. Operation of irrigation and drainage equipment

This will cover ditching as well as other activities linked to the operation of irrigation and draining equipment, for example laying of drains.

9. Lopping, trees felling and other forestry services

Other forestry services are any services performed in a woodland / forest by flat rate farmers and/or their employees using the farmer’s own equipment. This can range from clearing undergrowth, spraying trees, marking trees for felling, making an inventory of trees suitable for felling or creating firebreaks.

Milk quotas: The sale or leasing of milk quotas - whether or not they are sold with land - is not a designated activity.