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HMRC internal manual

VAT Food

Items benefiting from the relief: animal feeding stuffs: ‘held out for sale’

The way in which Item 2 is phrased restricts relief to products which are actually to be fed to animals, unlike Item 1 which only requires a product to be of a kind used for human consumption. If, therefore, a product which would normally be used for animal feeding is held out for sale for some other purpose, the supply is standard-rated. The supply will also be standard-rated if the product is canned, packaged or prepared and held out for sale as pet food.

The criteria by which to judge how a product is being held out for sale are covered in Notice 701/15, Food for Animals. It is worth stressing that we do not standard-rate the supply of a product which would normally be zero-rated as animal feed simply because the supplier knows that his customer is going to use it for some other purpose. For the supply to be standard-rated, the supplier must positively hold the product out for sale for that non-feed purpose, or for pet food.

It is particularly important to remember this when you are considering the borderline between zero-rated animal feeding stuffs and standard-rated pet food. In many cases we and the supplier both know that the product is primarily going to be bought by pet owners and eaten by pets. However, if the product would be equally suitable for feeding to animals other than pets and has not been specialised to the pet food market by its preparation or presentation, then we only consider it to be pet food if the supplier specifically holds it out for sale as such.

Special ‘held out for sale’ criteria apply to sales of straw under an agreement reached with the British Hay and Straw Merchants’ Association - see Notice 701/15, Food for animals.