AI Services & Post-Letting Expenses

Treatment of A.I. services and sales of livestock semen

Tax Briefing Issue 30 gave details of proposed Finance Bill changes in this sector and these are now incorporated into Section 108 Finance Act 1998. In addition to a reduction in the rate of VAT from 21% to 12.5% for livestock semen and animal insemination services the section provides that farmers (including A.I. stations) selling livestock semen, in excess of £40,000 value per annum, are taxable persons and are obliged to register and account for VAT. The section also provides that sales between A.I. stations which are regarded as flat-rate farmers for VAT purposes and sales from A.I. stations to their VAT registered subsidiaries will be excluded in calculating turnover for the purpose of VAT registration.