Whilst ornamental plants and seeds that produce such plants, are standard-rated, food for human consumption is zero-rated under Group 1 Schedule 8 VATA 1994. This includes not only edible plants (fruits and vegetables), but also their means of propagation such as seeds and spores.
Although in most cases it will be obvious which plants are of species which are generally accepted as reared primarily for culinary use or to produce food, (VAT Notice 701/38 https://www.gov.uk/guidance/zero-rating-certain-seeds-and-plants-for-vat-notice-70138 provides a good analysis) , there are some categories which are not so obvious, in particular herbs and aromatic plants. Section 4 of Notice 701/38 states:
“Plants which do have recognised culinary uses, although they are not species supplied predominantly as culinary herbs, may be zero-rated provided all the following conditions are fulfilled.
- They have been raised according to the conditions required by the Food and Environment Protection Act 1985 (in cases of doubt, you may need to supply documentary evidence of this).
- They have been specifically held out for sale as culinary herbs (for example, described as such on invoices or in catalogues) and, where appropriate, displayed apart from ornamentals with other culinary herbs.
- They are supplied in individual pots (not in bedding strips) of a size less than 2 litres.
- In the case of bay plants, they do not exceed 50 centimetres in height, nor have they been clipped, shaped or topiarized in such a way as to specialise them as ornamentals.”
In terms of the growing kits, again Notice 701/38 provides some clarification in paragraph 6 where it states:
“Plant-growing kits or plant-starter kits typically consist of seeds, growing medium and some form of container, together with fertiliser and an instruction leaflet. Such kits are generally standard-rated regardless of whether the seeds are of a kind which would normally be zero-rated.
But the kit may be zero-rated provided:
The seeds are zero-rated and the standard-rated element of the kit (for example, growing medium, fertiliser and pot) accounts for less than 10% of the total cost; and the planting medium, which is impregnated with edible vegetable or fruit seeds, is no more than a means of simplifying the planting of the seeds (for example, peat cubes of less than 125cc impregnated with seeds, or thin layers of tissue incorporating seeds).”
In your clients case they will have to check that the ceramic container and compost elements meet that 10% test, otherwise there will be a mixed supply and an apportionment will have to made between the different VAT liabilities. Information on fair and reasonable apportionment can be found in section 31 of VAT Notice 700 https://www.gov.uk/guidance/vat-guide-notice-700#apportionment-of-output-tax.
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