Accounting Firms

Duncan & Toplis partners with NFU to update HMRC VAT guidance

Previously, under the agricultural and horticultural crops section in HMRC’s guidance document, any trees and fruit bearing shrubs not listed under paragraph 3.5 were not treated as ‘zero rated

Duncan and Toplis has revealed a partnership with the National Farmers Union (NFU), which successfully encouraged HM Revenue and Customs (HMRC) to update its guidance on VAT zero-rating for trees and fruit bearing shrubs.

Previously, under the agricultural and horticultural crops section in HMRC’s guidance document, any trees and fruit bearing shrubs not listed under paragraph 3.5 were not treated as ‘zero rated’.

This meant any grower who had a plant not mentioned in the list was faced with the hefty full standard rate of VAT (20%) on their produce.

After partnering with the NFU, the firm said it was able to approach HMRC’s policy unit regarding the matter which eventually led to a guidance update; removing the words relating to the plants listed in paragraph 3.5 as being an “official list”.

The guidance from HMRC has also added a number of new plants to the existing list online,.

Director and head of VAT, Christine Newitt, said: “We’re so pleased to have been able to change this policy for not only our clients, but for other growers across the country who may be faced with the same problems.

“Unfortunately, many growers across the UK may not be aware of this prescriptive guidance online and may be unnecessarily paying out VAT on fruit bearing plants and trees without knowing.“

She added: “While guidance is not the law, it is HMRC’s interpretation of the law and growers and retailers can face an expensive battle if they zero rate any fruit bearing shrub that isn’t on the list in this guidance.”

“If any growers have plants that aren’t featured on HMRC’s guidance list then we advise businesses to approach HMRC under their representative body with evidence that the plants are normally grown in the UK for the production of edible fruit, and are held out for sale for this purpose.”

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