VAT – The Biggest Tax Issue!
DIY livery (or rent) is an exempt supply of a right over land on which you do not have to charge VAT (unless an option to tax has been made).
Where there is no element of care provided hay and straw supplied as feed can also be zero rated.
If additional services are provided such as feeding or mucking out then the supply is likely to be deemed as standard rated.
The reclaiming of input VAT is subject to the partial exemption rules if exempt supplies exist.
Other Tax implications
DIY livery is not viewed as farming and is not really a trade so there is the risk that Agricultural and Business Property Relief may be jeopardised.