An article from the CLA Land & Business magazine.

1. N E W S F E at u r E
Is the tax
man
gunning
for you?
Following our recent seminars on the
rules and regulations which impact
on shoot owners and managers,
John Endacott, of Francis Clark LLP,
looks at the tax implications
For landowners or those to non-domestic rates. The overlooked. Harrison showed the Shoot
otherwise involved in point here is that agricultural There are a number of VAT Project Team to be overzealous
running shoots, it is land is not subject to business cases concerning shooting in pursuing a syndicate
important that tax issues rates but this does not apply and in particular whether the organiser. This case didn’t
are not overlooked. to land used in commercial activities amount to a business establish any new principles
Although there are no special shoots. However the general or not. In the High Court case (Harrison was not a landowner
tax rules for shoots or shooting principle is that a change of of the Right Hon Lord Fisher exploiting shooting rights
rights, there are a number of use for planning purposes is it was held that the payments and nor was he carrying on a
tax implications that can be only required where an activity made to his lordship did not commercial business) but does
easily missed. In particular, H is carried on for more than amount to trading receipts show that HMRC assertions
M Revenue & Customs (HMRC) 28 days and so farmland can but rather simply the sharing should not be accepted without
have a specialist Shoot Project be used in a shoot without of costs between family and challenge.
Team based in Norwich which triggering a rates liability as friends. As such he was not Returning to the subject of
undertakes tax investigations long as this condition companies, an interesting
involving shoots (especially is met. Anyone that is VAT Tribunal case from last
VAT) and there are a number of concerned about this “Although there year concerned Thimbleby
organisations such as Animal should take specialist Farms Limited where the
Aid that are more than happy advice from a land agent.
are no special tax shoot was undertaken by
to ‘shop’ shoots that are not It is also important rules for shoots or a limited company which
complying with the rules. to ensure that pay as allowed the shareholder free
If you have any doubt you earn obligations are
shooting rights, there shooting rights. Whilst these
about this then I suggest you complied with. These are are a number of tax had been declared to HMRC
download the document ‘How set out in the HMRC PAYE as benefits in kind for income
to oppose shooting: a practical manual 23015 and there
implications that can tax purposes it was held that
guide’ from the internet. is a long standing CLA be easily missed” they were also standard rated
The most important thing to agreement regarding supplies for VAT purposes. It
get right is to be consistent as the treatment of cash is therefore important not to
to what the activity represents. payments to casual beaters. liable to charge VAT on the overlook non-cash transactions
If it is a personal hobby then However it is not only cash sums involved. That case such as allowing use of land
expenses relating to it should payments that are a concern needs to be contrasted with to a syndicate by a member
not be put through the trading as there are also issues over the subsequent VAT Tribunal or allowing a shoot operator
accounts of another business benefits in kind provided to decision in John Williams where to operate in return for some
(such as a farm) or losses employees and it may also it was held that the syndicate private shooting. Each case will
claimed against other income. be possible to put in place a organiser was engaged in however turn on its own facts.
Equally, if it is a business then PAYE Settlement Agreement a business and was making All in all, the important thing
proper separate accounts need to deal with such benefits. A taxable supplies in the form of is not to overlook the basics
to be kept and returns made particular problem to watch for the contributions to the Guns. and to get good professional
as such. Whether it is trading is where a company is involved, It is a fine line between the two advice.
income or merely property either undertaking the shoot cases.
income also needs to be or incurring expenditure, and In June this year a further John Endacott is a Tax
considered. the individual concerned is a VAT Tribunal decision on this Partner at Francis Clark
A particular ‘nasty’ to look director of the company. It is point was published. The LLP and can be contacted
out for is a potential liability easy for such benefits to be decision in Edward George on 01872 246586.
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