VAT on livestock, animal feed and seeds

The VAT zero rate for food in Group 1 of Schedule 8 to the VAT Act 1994 also covers the start of the food chain: animal feeding stuffs, seeds and plants grown for food or feed, and live animals of a kind generally used for, or producing, food for human consumption. Pets and horses fall outside that logic, so a horse is standard rated, and pet food that is canned, packaged or prepared is standard rated, while feed for farm animals stays at the zero rate.

What does the law actually say?

Group 1 of Schedule 8 to the Value Added Tax Act 1994 zero rates four general items:

1. food of a kind used for human consumption;
2. animal feeding stuffs;
3. seeds or other means of propagation of plants comprised in items 1 or 2; and
4. live animals of a kind generally used as, or yielding or producing, food for human consumption.

The policy reason is simple. If the food on the plate is zero rated, taxing the seed, the feed and the animal that produced it would build VAT into the cost of food. The notes to the Group say “animal” includes bird, fish, crustacean and mollusc.

The zero rate is then taken away by excepted item 6: pet foods that are canned, packaged or prepared; packaged foods (other than pet foods) for birds other than poultry or game; and biscuits and meal for cats and dogs. The standard rate is 20%. HMRC explains how it applies these rules in VAT Notice 701/15 (animals and animal food) and VAT Notice 701/38 (seeds and plants). For the human food rules, see VAT on food.

Which live animals are zero rated?

Notice 701/15 paragraph 2.1 allows the sale, hire or loan of a live animal, or the supply of a share in one, to be zero rated where the animal is of a kind generally used in the UK as, or for producing, food for human consumption. Paragraph 2.2 gives meat animals, dairy animals, poultry (other than ornamental breeds), honey bees and most food fish as examples. Paragraph 2.3 lists bumble bees, ornamental birds and fish, racing pigeons and horses as standard rated.

The test is about the kind of animal, not what the buyer intends to do with it. Under paragraph 2.6, sheep kept mainly for wool and bulls kept for breeding are zero rated because they are of a food producing kind. Under paragraph 2.5, a rabbit bought as a pet is zero rated unless it is an ornamental breed. The reverse also applies: kangaroo meat may be on sale in shops, but kangaroos are not generally reared for food in the UK, so a live kangaroo is standard rated (paragraph 2.4). Animals removed from the food chain because they are unfit for consumption, for example through disease, are standard rated (paragraph 2.7). Embryos of food species supplied for breeding can be zero rated, but anything below embryo stage, such as semen, is standard rated (paragraph 2.8).

How is animal feed treated?

Most food fed to animals is zero rated, including straights, compound feeds, protein concentrates and supplements recognised as feeding stuffs by the trade and by farmers (Notice 701/15 paragraphs 4.1 and 5.1). Mineral blocks, licks and poultry grit are included (paragraph 5.3). The supplier’s own purchase price is not the test: paragraph 4.2 says a product is zero rated as animal food only if it is held out for sale as animal food, judged by its labelling, packaging, display, invoicing, advertising and catalogue heading.

The detailed rules have some sharp edges:

• ingredients with no significant nutritive value, such as flavourings, binders and colourings, are standard rated, and probiotics are always standard rated (paragraph 5.2);
• medicines are not food even when given in feed, and a medicated feed covered by a product licence or marketing authorisation from Defra is generally standard rated (paragraph 9.4);
• straw sold to market gardeners for compost or to non farming businesses for packing is standard rated (paragraph 9.5);
• grazing rights for horses, sheep or other grazing animals are zero rated as animal feed (paragraph 9.6), but the keep of animals, where feed is supplied as part of a care service, is standard rated as a whole (paragraph 10.1).

Why is pet food standard rated?

Notice 701/15 paragraph 6.1 standard rates any animal food that is biscuit or meal for cats and dogs, specially prepared for a pet species, canned or packaged as pet food, or held out for sale as pet food. Paragraph 6.2 lists the pet species: cage birds, cats, dogs (except working dogs), ferrets, goldfish and aquarium or pond fish, guinea pigs, and hamsters, gerbils, rats and mice not bred for laboratories.

“Packaged” has a precise meaning. Paragraph 7.2 says it means pre packed for retail sale in a container of 12.5 kilograms or less; loose produce put into a plain bag at the point of sale is not packaged. Paragraph 6.4 allows food held out exclusively for working dogs, such as working sheepdogs, gun dogs, racing greyhounds and assistance dogs, to be zero rated unless it is biscuit or meal; a product sold as suitable for all breeds is standard rated.

How are horses and other animals kept as pets treated?

A horse is standard rated when sold, because horses are not generally reared for food in the UK (Notice 701/15 paragraph 2.3). Its feed is a different question. Paragraph 6.3 says horses and ponies, along with chickens, rabbits, reptiles and sheep, are not pet species even when kept as pets, so their food is zero rated unless it is packaged or held out for sale in a way that shows it is intended for a pet. Hay and horse feed sold as ordinary feeding stuffs therefore stay at the zero rate.

Livery is treated separately. Exclusive use of a stable is either an exempt property supply or standard rated if the owner has opted to tax (paragraph 10.2; see option to tax). A full livery package of stabling, feeding and care is standard rated unless the stabling is exempt and not opted, in which case the whole package is exempt, except where the stables are special purpose stables such as racehorse trainers and stud farms, whose livery packages are standard rated (paragraph 10.3).

Which seeds and plants are zero rated?

Notice 701/38 paragraph 3.1 zero rates crops grown to produce food for human consumption or animal feeding stuffs, and the seeds, seedlings, crowns, spores, tubers and bulbs of edible vegetables and fruit. Paragraph 5.1 confirms that vegetable seeds, culinary herb seeds, and wheat, barley and other agricultural seeds grown for food or feed are zero rated. Seeds and plants grown for ornament, or for perfumes, pharmaceuticals or other non food uses, are standard rated (paragraphs 2.1 and 3.2), so tulip bulbs and evening primrose are standard rated.

Some specific points from the notice:

• most grass seed is zero rated because grass is widely used as animal feed, but pre germinated grass seed and turf are standard rated (paragraph 5.3);
• fruit trees and bushes normally grown in the UK for edible fruit, such as apple, pear, plum and blackcurrant, are zero rated, but flowering cherry and other ornamental varieties are not (paragraph 3.5);
• most rootstock is standard rated, except cucumber and tomato rootstock (paragraph 3.6);
• a closed list of flower seeds, including nasturtium and pot marigold, can be zero rated only when held out for sale as edible (paragraph 5.2);
• plant growing kits are generally standard rated, unless the seeds are zero rated and the other contents account for less than 10% of the total cost, or the growing medium is just a way to make planting easier (paragraph 6.1).

How would a farm supplies store apply this?

Illustration only. A country store sells the following in one day.

Item	VAT treatment	Why
Two store lambs	Zero rated	Live animals of a food producing kind
A 20 kg sack of horse and pony nuts	Zero rated	Horses are not a pet species and the sack is over 12.5 kg
A 2 kg bag of hamster mix	Standard rated	Prepared and packaged food for a pet species
A 15 kg bag of dog biscuits	Standard rated	Biscuit for dogs is always standard rated
Seed potatoes and runner bean seed	Zero rated	Means of propagation of food plants
Rolls of turf	Standard rated	Turf is not used to propagate animal feed
A pony	Standard rated	Horses and ponies are standard rated animals

A store selling a mix like this needs its till system to code each product correctly. For how the rates fit together more generally, see VAT rates explained.

What mistakes come up most often?

• Assuming anything sold to a farmer is zero rated. Medicines, probiotics, single chemicals and thatching material are standard rated even when bought for a farm.
• Ignoring how the product is presented. The same peanuts are zero rated in bulk as animal feed but standard rated when packaged and sold for wild birds (Notice 701/15 paragraph 8.5).
• Treating horses like livestock. The animal is standard rated even though its feed is usually zero rated.
• Splitting livery bills. The feed element of a care package cannot be zero rated separately.
• Confusing zero rated with exempt. Zero rated sales are taxable at 0%, which has different consequences from exemption; see zero rated versus exempt supplies.

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Related Accountapedia entries

• Valuing farm livestock and crops for tax
• The herd basis election for farmers
• Farm diversification: the tax implications
• VAT on donated goods sold by charities
• Hot takeaway food and catering VAT

Sources

• legislation.gov.uk: Act 1994 c. 23, schedule 8
• GOV.UK: Vat rates
• GOV.UK: Animals and animal food notice 70115
• GOV.UK: Zero rating certain seeds and plants for vat notice 70138

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.