Plants and seeds

By Tolley
VAT_tax_img3

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Plants and seeds
  • Background
  • Agricultural and horticultural crops
  • Herbs
  • Seeds
  • Mushroom and plant-growing kits
  • Seeds supplied with books

This guidance note provides an overview of the VAT treatment of plants and seeds.

Background

Supplies of most types of basic foodstuffs for human or animal consumption are zero-rated. Depending on how they are held out for sale, the zero-rating provisions also extend to plants and seeds that are used to produce zero-rated foodstuffs. See the VAT treatment of supplies of food guidance note for more information on zero-rated food items.

VATA 1994, Sch 8 Group 1 Items 1, 2 and 3; VAT Notice 701/38 ; VFOOD3400; De Voil Indirect Tax Service V4.224 (subscription sensitive)

The following items can be zero-rated if they meet the relevant conditions outlined below:

  • plants
  • seeds or other means of propagation, such as spores and rhizomes, used to produce zero-rated plants
  • seeds that are used directly as food
Standard rated plants and seeds

The following supplies will be liable to VAT at the standard rate:

  • seeds, plants and cut flowers which are bought for their ornamental purposes (eg ornamental nursery stock including trees, shrubs, herbaceous plants, alpines and pot plants), and
  • produce which is held out for sale:
    • as pet food
    • packaged as food for birds other than poultry or game
    • for a non-food purpose

When determining how the item is ‘held out for sale’, HMRC will consider the way the item is packaged, displayed, advertised or promoted for sale in the shop or in the catalogue / website or on the price list / invoice, etc.

Agricultural and horticultural crops

If the crop produces items that are not normally

More on Farming and agricultural activities: