Dogged Determination re VAT

1st October 2012

A chance conversation between board members of Supreme Petfoods Ltd in 2009 may result in a huge VAT rebate for dog food company Roger Skinner Ltd.  Paul Whittle of Whittle & Co, in his role as a non-executive director for Supreme, was reporting on a forthcoming repayment claim for output VAT on sales of ferret food on the basis that it is possible that ferrets could be categorised as working animals rather than pets.  As the law stands, pet food is, in general, standard rated for VAT.  However, if the food is designed specifically for working animals and is a complete meal, the supply can be zero rated for VAT.   

As fellow non-executive director Roger Skinner listened on, the penny, - or should we say potentially £6 million pounds?  -  dropped.  Since the 1970s, Roger Skinner’s company has successfully made dog food in the village of Stradbroke, Eye and over that period the company has paid out almost £7 million in VAT.  But what makes Skinner’s different from most of its competitors is that it specialises in producing product targeted at gun and working dogs.  

Spurred into action to make the most of a window of opportunity brought about by a Government error in introducing an illegal cap of 3 years on back claims, Paul Whittle was appointed to lead the team putting together a rebate claim for Roger Skinner Ltd going back to 1980. Barristers Michael Conlon QC and Anne Redston acting as counsel, and Peter Crix of Gotelees in Ipswich acting as the solicitors, then presented the case to the VAT Tribunal in April/May 2012.  

The judgement was handed down in August ruling in favour of the business.  HMRC are, however, applying for leave to appeal and so for now, just a case of a bit of a “paws” in the celebrations!