VAT reclaim opportunity: five areas that Vineyards often miss

Growing vines means years spending before the first commercial vintage, and from tasting rooms to tanks, much of it carries VAT. For WineGB members, a few areas regularly hide unclaimed VAT.

Pre-registration VAT

If you registered after planting, you should potentially be able to reclaim the VAT incurred on capital items and goods you still hold (up to four years back), as well as on services you received (up to six months back). Expenditure on vines, posts, wire, machinery and professional fees can add up to a significant VAT claim.

Machinery and equipment

The VAT incurred on tractors, sprayers, presses, tanks, and bottling kit is generally recoverable when incurred for use in making taxable wine sales. You should retain all valid VAT invoices, and as appropriate, apportion any private use.

Tasting rooms and visitor centres

Wine tourism is a major growth area in the UK, however, VAT treatment on construction services can be very complex. Whether this can be recovered would depend on the type of build, and sometimes on option to tax implications. All issues to do with this should be resolved well in advance of starting construction works.

Mixed income

Sales of grapes and wines are taxable, but income such as certain lettings, may be VAT exempt. If you have both, then VAT partial exemption rules may limit what you are able to reclaim. However, a well-designed partial exemption method can potentially improve recovery.

Events and hospitality

The VAT incurred on costs such as catering, marquees and staffing for paying guests is generally recoverable. However, in general, expenditure on client entertainment is not recoverable, subject to one or two exceptions.

Have a look at the following checklist:

• Have you claimed pre-registration VAT?
• Is your option to tax documented?
• Are you keeping valid invoices for all major purchases?
• Do you have mixed liability income?
• If so, do you have apartial exemption method in place?

An offer for WineGB members.

Carpenter Box (part of the Sumer group) works with English and Welsh wine producers and is offering a free 20-minute VAT review to WineGB members to book a VAT health check for potential missed VAT reclaims, ideally before any planting, build or expansion begins.

To learn more about how we can assist you with claiming pre-registration, reach out to a member of Carpenter Box’s vineyard team on 01903 234094.