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HMRC internal manual

VAT Food

Items benefiting from the relief: animal feeding stuffs: keep of animals

It is important to differentiate between a simple grant of grazing rights (zero-rated) and the supply of the keep of animals (standard-rated), which might include a grant of grazing rights. Where there is a written contract between the parties, the distinction is likely to be obvious from the contract. However, it is possible that the parties may have drawn up a formal grazing agreement, but have entered into an additional agreement (written or verbal) extending the relationship to include care. It is therefore advisable, as well as examining any contracts involved, to determine exactly what is being provided by the landowner in practice.


Notice 701/15, Food for Animals, outlines the elements of care which, for VAT purposes, identify a supply of keep. However, it is important to remember that many of these arrangements are relatively informal and lines of responsibility may not be strictly drawn up. For example, we would consider the supply to be one of keep where the landowner takes on the responsibility for the care and welfare of the animals while on his land; but any responsible stockman might, when necessary, take steps to aid an animal in obvious distress, even in the absence of any formal assumption of liability.

For example, a landowner might call in a vet to a sick or injured animal without reference to its owner in order to save time in a recognised emergency, or because he is aware that this is what the owner would do himself. This would only be evidence of care in our terms if it were understood between the parties that it was the landowner’s actual responsibility to do so under the terms of the contract between them.

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Where sufficient element of care is present to make the supply one of keep, that supply cannot be split into its various elements (such as feed, stabling, care services) with each element taxed as if it were a separate supply and the consideration apportioned between them. The provision of keep is a single standard-rated supply, and the whole consideration is standard-rated. The tribunal most recently examined this type of supply in Leander International trading as Arden Grange, deciding that the supply by a kennel/cattery was a supply of care and / or keep of animals, and was not an exempt supply of land. This is distinct from a supply such as that of stabling, where the principal element of the supply is that of a supply of land (see the John Window tribunal, VFOOD3140).

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Specialist services

We maintain that stables supplying specialist services are not making an exempt supply of stabling. For example, race horse trainers, stud farms and training (such as horses receiving schooling or breaking in) are specialist supplies where the specialist element of the supply predominates the supply of stabling, which is ancillary. Any queries about what constitutes such a supply should be referred to the VAT Reliefs Policy Team.

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Tribunals concerning the keep of animals

There have been a number of tribunal cases dealing with stabling, keep of animals and animal feed.


Derrick Dennis Scott (CAR/75/0206) operated a stud farm. Mares brought for covering by his stallion remained on his premises, normally at grass, until the service was effectual. For this, Mr Scott charged a one-off service fee plus a further weekly charge while the mare was on his premises. The service fee was standard-rated, but he zero-rated the weekly keep charge as being for a supply of animal feed.

The tribunal, ruling that the total consideration (including the keep fee) was in respect of all the appellant’ s obligations under the contract, nevertheless allowed these various obligations to be treated in effect as separate supplies (including one of animal feed), and output tax apportioned between them. However, on appeal, the High Court held the transaction relating to each mare to be in substance and reality a single supply of the keep of animals and standard-rated.


Similarly, in the case of Dennis William Bushby and Margaret Josephine Bushby (CAR/77/0027), the tribunal (following the precedent of the Scott case) also found initially for a mixed supply and apportionment; but again, the decision was reversed on similar grounds by the High Court.

Angus Rory Mitton Smith (MAN/87/0321)

Angus Rory Mitton Smith was in the business of contract rearing calves. He attempted to divide the consideration between a supply of animal feed (grazing) and a supply of management charges (keep), standard-rating the management charge only. Following the precedent established in Scott and Bushby, the tribunal found the appellant’s supply to be a single one of keeping cattle, and standard-rated.

Holt Manor Farm

The case of R W and J R Fidler trading as Holt Manor Farm (LON/94/0798A) concerned the distinction between grass livery and keep. The appellants provided grass livery on a seen twice daily basis but, if they judged anything to be wrong with the animals seen, would arrange for a vet to visit on their own initiative. They also arranged for regular worming and shoeing, and charged the owners for these services (plus VAT). The tribunal found that, where these extra services were provided, they did not constitute part of the supply by the appellants, who were acting rather as agents for the owners in this respect. It was not considered to be a supply of care.

Suzanne’s Riding School

A similar line was taken in the case of Suzanne and Julian Marczak trading as Suzanne’s Riding School (LON/94/1682A), where similar occasional extra veterinary and farriery services were arranged for by the appellants in respect of horses for which they provided basic grass livery. However, in this case it was understood that such services were to be provided only in an emergency, not as a recognised part of the contract for livery. The tribunal found that, in the absence of any contractual obligation on the appellant’s part to provide such services, they were correctly treated as separate from the basic supply of grass livery.


John Window (LON/00/0011) owned stables. He received rent from owners of horses which were kept at the stables but did not account for VAT on the rent, treating it as exempt. Customs and Excise issued an assessment on the basis that, because the trader also supplied additional services such as feeding and watering, the charge was for the keep of animals and was standard-rated. The tribunal allowed the appeal, holding that the trader was making a single exempt supply, and that, by application of the Card Protection Plan principles, any additional services were ancillary to it.

Arden Grange

In the case of Leander International, trading as Arden Grange (LON/02/0575), the appellant maintained that a supply by a kennels / cattery should be exempt. They argued that, applying the Card Protection Plan principle and the precedent set by the John Window case (above), the supply of land was the principal element of the supply and should determine the liability of that supply. HMRC argued that the supply was one of care of which the supply of land was a minor element in the wider package of care provided by the kennel / cattery. The tribunal decided in favour of HMRC.