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HMRC internal manual

VAT Registration

Voluntary registration: particular trade sectors: horse breeders and/or dealers

Examine intending trader applications from traders who claim that they will be conducting a horse breeding and/or dealing business with particular care.

In the past, it has been found that many such applicants have a history of recreational involvement with horses and that they seek registration in respect of what is, in effect, a loss-making hobby.

Before allowing registration, you must be satisfied that the applicant’s intention is to breed horses or to purchase horses for subsequent sale (as distinct from, for example, breeding horses for the applicant to run).

For the proposed activity to be a ‘business’ for VAT purposes, there must be a clear and realistic intent to make taxable supplies on a regular and continuing basis.