VAT on Dog Food – Why I Need an Accountant.

Unlike solicitors or doctors, anyone can call themselves an accountant.

Currently a significant number of accountants providing advice to taxpayers have no qualifications and are not regulated. Unlike qualified accountants, they have no requirement to have professional indemnity insurance and will have no formal mechanism for having complaints passed on to their professional bodies.  They also do not have to possess any relevant knowledge to call themselves accountants and will not be required to undertake continuing professional education.

Also a significant number of self employed individuals do not use the services of any accountant or adviser. There will be a reasonable prospect that tax returns submitted without relevant professional assistance will  contain errors. UK taxation rules are extremely complex. In many cases it is important for an accountant and tax adviser to know that a question exists, rather than knowing, without research and further advice, what the answer to that question is.

VAT should be one of the most straight forward taxes in the UK. Most people in the UK know that the standard rate of VAT is currently 20% and that other supplies have no VAT charged on them.  However as an example of the complexities of taxation, and hence a reason why taxpayers should chose to use the services of an accountant, set out below is a quick summary of VAT on dog food.

As a general rule VAT on food is zero rated. However VAT on certain edible items is standard rated (eg biscuits, food eaten in restaurants, hot food take aways etc).  What is the VAT rate applied to dog food?

A self employed person not using the services of a suitable professional adviser, may well conclude that as food is zero rated, then dog food would also be zero rated.

The answer, as with much of UK taxation rules is far more complex. The basic position is that sale of pet food is standard rated (an exception to general rule of food being zero rated). However the answer is more complex than that. The question which has to be answered is whether the dog food is pet food. Where dog food is manufactured and marketed for working dogs only, with no indication that they can be given to pet dogs, then the dog food can be zero rated.