VAT - Frequently Asked Questions
I want to become VAT registered under the registration scheme for racehorse owners. What is the qualifying criteria?
The ownership entity must own at least 50% of a horse, which is in training in the UK with a licensed trainer and is covered by a third-party sponsorship.
The BHA have D1 and D2 forms for VAT registration. Which should I use?
Use a D1 to register an individual owner (sole proprietor), company or Racing Club for VAT. Partnerships and Syndicates should use a D2 form.
I only own 25% of a horse. Does that mean I can’t recover VAT I have paid?
You wouldn’t be eligible to register for VAT as an individual (sole proprietor). However, you can recover the VAT you have paid by registering for VAT as a partnership with other partners, as long as the aggregate share you own is 50% or greater.
I sponsor my own horse as a self –sponsorship. Is this sufficient to qualify?
No, the sponsorship must be by a third-party. This can be in addition to a self-sponsorship.
I own several horses (all 100% in same ownership). Do I need to register for VAT for each horse?
No, the VAT registration will cover all qualifying horses for the ownership entity.
I bought the horse before I registered for VAT. Can I reclaim the purchase?
When registering for VAT you will be given an effective date of VAT registration (EDR), usually the date BHA approve your D1/D2 application. You can recover VAT on the purchase invoice of the horse up to four years prior to the EDR if the VAT entity owns the horse 100%, this is reduced to six months for a lesser ownership share. For all other VAT recovery, e.g. training, vet fees etc you can recover VAT on valid invoices dated up to six months prior to the EDR.
How often are the VAT returns done?
Racehorse owners VAT returns will fall on a quarterly basis, so are submitted every three months.
How do I send in my invoices for ROA VAT Solution to recover VAT?
Invoices can be uploaded or emailed into Xero via Hubdoc or sent by post.
What items can I recover VAT on?
A non-exhaustive guide to VAT recoverable items under the Racehorse Owners VAT Scheme can be found in the following document:RECOVERABLE VAT FOR RACEHORSE OWNERS.pdf
I am selling a horse. What are the VAT implications?
If you are selling a horse, you must charge VAT on the sale price at the standard rate (currently 20%). If you are selling the horse through a sales house (e.g., Tattersalls/Goffs) please advise them of your VAT number prior to the sale to ensure VAT is applied to the selling price. If you are selling the horse privately, ensure a sale invoice is raised to include VAT and your VAT number is raised. ROA VAT Solution can assist with a sale invoice template if necessary.
N.B. If VAT is not applied to the sale HRMC will treat the sale as VAT inclusive so 20% of the sale price will need to be declared to HMRC, otherwise client will lose out!
Why have I received VAT on prize-money, but not on the Prize Percentage of Stakes?
Prize-money is subject to VAT at the standard rate. Percentage Prize of Stakes is outside of scope for VAT, as is made up from portion of entry fees which are also outside scope of VAT.
My return has been submitted to HMRC. When can I expect funds to be received in my account?
Typically, funds are received within 7-10 working days from the date of submission. However, HMRC advise to allow 30 days before they can be contacted for chasing of funds.
It is possible that for larger VAT returns (VAT received exceeds £10,000) HMRC will request further information before processing which can delay the receipt of payment.
I was previously VAT registered and have purchased a new horse. Can I use/resurrect my old VAT registration?
If the previous VAT Registration was deregistered with HMRC, you will have to re-register and will receive a new VAT Registration number.
Still have a query? Contact our VAT Solution team on [email protected] or on 0118 3385 685