Items benefiting from the relief: live animals: law and interpretation
The legal basis for the zero-rating of live animals is the VAT Act 1994, Schedule 8, Group 1, General Item 4 which provides for zero-rating of:
- Live animals of a kind generally used as, or yielding or producing, food for human consumption
In addition, further clarification is added by Note (2):
(2) “Animal” includes bird, fish, crustacean and mollusc.
The key phrase in interpreting the effect of Item 4 is of a kind generally used as.
The live animal must generally be used as, or yielding or producing, food for human consumption. The phrase generally used as has the effect of removing from the relief, all animals which are not widely used for food in the UK. Such animals may occasionally be eaten, but their use is not wide spread enough to form part of the national diet.
Coarse fish are used mostly for recreational purposes; and horses are examples of animals which may be eaten but are not generally reared for food. An ordinary pigeon is zero-rated as poultry; but racing pigeons are standard-rated for, although they belong to the same species as ordinary pigeons, they are bred specifically for recreational or sporting purposes.
Most pigs are generally reared for food, but micro pigs are pigs of a kind that are sold as pets and therefore do not meet the criteria for zero rating,
Another example is kangaroos. Whilst you may occasionally find kangaroo meat on a menu, it is not a species generally used as food in the UK. Accordingly, if they are sold live they are standard-rated, whereas if they had been killed and prepared as meat, the meat itself would be zero-rated as food.
Animals which are used for sports, show animals and pets are excluded from zero-rating as they are not generally used as, yielding or producing food for human consumption. Live animals which have been specially bred for exhibition purposes, but are of a kind used as food in the UK, such as prize bulls, will still be zero-rated.
Thus the supply of any live animal is zero-rated if it is:
- generally used as food for human consumption; and/or
- yielding food for human consumption; and/or
- producing food for human consumption. (The animal itself may not be eaten but may produce food eaten by man. An example is bees that produce honey for human consumption.)