VAT and Working Dog Food

[adamsmith]

As a dog owner and consultant to the Pet food industry I am very open minded, however the HMRC are less so and I think that Nutriments association of 'working dog' throughout their range to what appears to possibly avoid the additional charge of VAT is something that would worry me.  Just a 'heads up' that before now HMRC have back dated a business's sales and charged the VAT with the result of forcing a small suppler into considerable financial expense.

[Dottie]

That is interesting to know.  There are, of course other companies who are doing the same thing.  I don't understand the working dog/VAT free thing at all and I don't see how, in any practical way be policed.  It needs to be a level playing field - doesn't seem fair to the many small companies who are playing by the book.   These days there is very little difference between so called 'working' dog food and food intended for the pet market.  It seems fair to have VAT on all dog food or none. 

[Pegasus]

I hope Nutriment have consulted VAT man on their 'working' dog food. There is an ongoing case Skinners vs HMRC, with Skinners winning on the basis they advertise,package and market their foods for working dogs eg sheepdogs, gundogs, I would expect Nutriment to struggle to argue that a picture of a Papillon on the pack is advertising to a working dog market.

[Dottie]

I have split this topic because the issue of VAT on working dog food is a separate subject and applies to many companies who label their products as such. For anyone who is interested, the government document is here.  Section 6.4  and 6.5 is pertinent, as is section 7.   

The case referred to above i.e Skinners v HMRC is outlined here. In this case the company was asking for reimbursement of nine million pounds from backdated sales of dog food specifically targeted for use by working dogs. The company had been paying standard tax on their range of working dog food.  As Pegasus has said, Skinners won their case.  HMRC appealed and this was rejected - see here.

It would seem that the criteria is that the products are packed in plain bags and in larger quantities than is usual for pet food. Also it needs to be advertised and promoted as working dog food.  After that, anyone can buy it and no questions asked. 

[George]

...Nutriments association of 'working dog' throughout their range...

Is that the case? I have long assumed that their Dinner for Dogs varieties, listed separately from their Working Dog range on their website,  did carry VAT. Am I wrong?

[Tinyplanets]

I thought the same George as they are more expensive than the working dog range, although I can see little difference in the ingredients.

[Dottie]

Yes, their working dog food products are one range.  The other range is Dinner for Dogs, more expensive and quite clearly aimed at the pet owner.  The recipes are slightly different - I checked them a while ago but didn't take notes so have forgotten the details.  IIRC the fat in some of them is lower.  As a pet owner, when I first fed Nutriment I was advised to use the Light and Low Purine which are both part of the Dinner for Dogs range.  It also is the one that will be added to in the future with new products and smaller cartons (200g).  The intended market is quite clear i.e. the small, pet dog. 

[louisecragg]

Sorry but in my opinion

So funny david green you do have a bee in your bonnet about MWH

Same could be said for Eden as they sell the same recipe as their pet food in larger bags for working dogs?

Seems to me at no point do MWH mention 'pets' but their whole website is about working and sporting dogs and performance nutrition and activity levels. they dont seem to be selling pet foods and then labelling same recipes are working dogs like Eden do? oh and fish4dogs and other brands too?

I think trading standards  and HMRC would have more a field day with companies that sell one recipe but in two different names how is your company  compliant?

Who really frisks all the people who buy your VAT free food than your more expensive pet food which is the same recipe?

I dont have to send in my dogs sports achievements to be able to by your food that is labelled working and sporting and 20% in theory cheaper than the same recipe classed as pet food.

Neither do I have to show my dog is working and sporting when buying MWH or F4D or PAH working dog food, I buy the food knowing its 20% cheaper and suits my dogs needs activity levels etc  {my dog is working and sporting not that im asked}

Shameful jab at another company,people in glass houses and all that!

Take a look at other providers all doing a pet food then selling same recipe as a working dog food seems they are the ones playing a fine line these are the ones I would be investigating.

interesting thread

off to do some research now into how companies can label same recipes as pet food and a larger bag as working dog food seems a few need to be looking over their shoulders.
Lou x

[Dottie]

This thread is not about naming and shaming particular companies, but is about discussing the current HMRC legislation and how it works. 

Louise - David has kindly removed his comment but as you have mentioned MWH yourself, I have to say that it is in a different position to most companies in that all of it's range is labelled as 'working' and the advertising (including the website) reflects that.  However, that doesn't make the issue any different to the companies who, like Skinners sell one, or a range of products geared towards the working dog.  The outcome is the same - products intended to be sold under the HMRC law for working dogs are being sold to pet owners.   The difference is that companies who offer working food as part of their range are paying  tax on their products which are not zero rated.  They also offer choice that enables the purchaser to make up their own mind.

HMRC must know what is going on and if it wasn't legal under the current law, maybe we would see some action taken.  If they are concerned about it then they need to look at closing this loophole.  In it's current form the legislation is not working and HMRC must be losing millions of pounds because of it.  They need to be looking more closely at the definition of a working dog and at how to police the sale of food to owners of them.  If that cannot be done then all pet food should be zero rated or none at all.  There should be a level playing field.

[louisecragg]

Thankyou Dottie
I mentioned MWH in reply to David Greens post not as a highlight of a company that needed naming and shaming.

As I dont think that company is actually doing anything wrong.

I also mention F4D and Eden which are two of many many pet food companies labelling same recipe but holding one out as a pet food one as a working dog food.

My highlight was to the fact how is this policed and David Green would be able to enlighten us as he sells this product so he would know how his company and the company of whom he retails their food police this, which would be of help to you 'insider information' in your debate.

I also dont like to see any company slandered for practices but would like to understand the reasoning behind their conduct and I have emailed MWH asking them, which seemed to me after I sent the email rather dumb as they hold all their food out as a working and sporting dog food and its customers who choose whether that recipe would suit the needs of their dog and they buy it on the understanding it is formulated as a working and sporting dog food. But I will be interested in their reply, I have also emailed other companies for their opinion too.

Its really about  interpretation  the HMRC stand on this and if a company is VAT registered surely they have been inspected when they applied and when they submitted their accounts ?

Its interesting to see how and why companies hold items out for sale VAT free and to be fair why not if its a legitimate.

It may be unfair in your eyes as that food doesnt suit your dogs needs yet your pet food does thats 20% more expensive and it makes you cross and gives you an axe to grind or a debate to open on a forum. [keeps it interesting]

But for many customers if a pet food is held out for sale and on the same site a working dog food with the same ingredients  is cheaper and in a bigger bag I know which I would choose only natural to do so.

But then again how many customers  actually compare analytics  up until this website came along and the UK woke up and began to see on TV newspapers and social media that there was some issues with some foods in the opinion of others  We would all just buy what we could afford and follow what we had done and our parents had done feeding their dogs.

New wave now has come and people are realising there is a choice.

So fact is..if your current pet food company have same recipe cheaper but labelled as a working dog food  you would be crazy not to buy it and save yourself some money?

A working dog food should be 20% cheaper as its 0 rated for VAT some companies actually are selling a variation of their food as working dog food but its not 20% cheaper so is it a gimmick its merely a discounted bag of food?

It is something I have found really interesting and I will now trundle off and do some research.

Have a good day and thankyou for removing your post David very gentleman like but you could have offered this debate some insider knowledge which would have been extremely helpful

lou xx

[Dottie]

It may be unfair in your eyes as that food doesnt suit your dogs needs yet your pet food does thats 20% more expensive and it makes you cross and gives you an axe to grind or a debate to open on a forum. [keeps it interesting]

It doesn't make me cross Louise - far from it.  My comment about it being unfair is not because the products don't suit my dogs.  I have absolutely no problem with paying standard rate tax on dog food - they are pets, not working dogs and that seems right within the current legislation.  Indeed, I made it quite clear that my concern is for other, often small companies who are not zero rating their products.  The practice of selling working dog food to pet owners is widespread and I do not wish to criticise any one company for how they interpret the law - that is a matter for them.  They are clearly working within it or the HMRC would be taking action.

The current legislation is far too woolly and cannot be policed.  For instance, what is the definition of a working dog?  My own interpretation is that it is a dog that is essential to enable a person to do his or her job of work e.g. drug detection, security, police,  guide dog, sheep herding,  among others.  To me, it is not a dog who enables it's owner to pursue a particular hobby.  However, others may think differently. 

[David]

I personally believe that all dog food should be zero rated - after all, most human food is and for a fifth of British households it is a staple rather that a luxury.

At the end of the day, most ‘working dog foods' are suitable for pet dogs just as most working dogs would be fine on non-working formulas. It’s all just a question of who’s being targeted by the marketing which leaves it wide open for exploitation by both manufacturers and consumers.

Talking about ‘insider information’ though, while I was working with a pet food manufacturer about 5 years ago, the company asked HRMC directly about the legal ramifications of repackaging their standard formulas and selling them as working formulas, as a number of competitors were already doing at the time. HRMC said definitively that the same formula could not be used as both a pet food and a working dog food and the endeavour was abandoned. As it has been pointed out, an increasing number of companies are doing exactly that and they might well find themselves in hot water at some point in the future.

[louisecragg]

Thankyou David

I have just spoken to a lovely gent at trading standards and he said the same thing pet foods labelling same recipe as a working dog food are treading a very fine line.

Its grabbed my interest!
have a good day

Lou x

[Pegasus]

I expect the rules on VAT regarding working dog food to be looked at when the HMRC v Skinners case is finally finished - they really went into the detailing of the definition of working dog food. I think some companies may have trouble claming their food to be working dog - Skinners went to great lengths to say they marketed their food to working dogs - gundog, sheepdog and agricultural shows as well as clear 'country' style packaging to define their market - as far as I understand, they argued that they then distributed through wholesalers so, even though they marketed to working dogs they could not restrict who actually bought the food from the wholesaler. This is a different situation to many of the smaller firms selling 'working dog' food as they sell direct to the public through websites and therefore actually know who is buying their food. Some of these firms market themselves at agility shows but is an agility dog a working dog? I think the definition of working dog will change - dogs are no longer allowed to be used for hunting, hare coursing is banned so are greyhounds working dogs? On the flip side of this, guide dogs and assistance dogs are not classed as working dogs, so you cannot claim the VAT back off the HMRC
VAT and the pet industry is nuts - rabbit food = VAT free, as rabbits are classed as food - guinea pig food = standard rated