The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
This guidance note provides details on the margin scheme for supplies of second-hand horses and ponies. This note should be read in conjunction with the Overview of margin schemes and Operating the margin scheme guidance notes.
Businesses can sell horses and ponies that have been previously owned under the margin scheme and this was confirmed in the Förvaltnings AB Stenholmen v Riksskatteverket CJEU Case C-320/02 . Horses and ponies that have been bred and are being sold for the first time cannot be sold under the margin scheme. Also if VAT is shown as a separate amount on the purchase invoice, the business cannot use the margin scheme if it sells the animal.
It is recommended that businesses selling horses / ponies under the margin scheme follow the special procedures explained below.
Businesses can choose to use a three part form to account for VAT on the sale of the horse / pony under the scheme as an alternative to keeping the normal margin scheme records.
The three part form will provide the stock and sales records that the business is required to keep. Businesses using this form will not be required to keep a stock record which will help reduce the administrative burden.
The form has the following parts:
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