VAT and temporary movement of horses in and out of the UK

The temporary movement of horses across UK borders, whether for racing, breeding, training, or competition, requires careful navigation of VAT and customs rules, particularly post-Brexit.

Temporary Admission Relief

Horses temporarily imported into the UK may qualify for Temporary Admission (TA), a customs procedure that provides full relief from import VAT and customs duties, provided the horse is re-exported within a set timeframe (usually within 2 years). This is particularly relevant for horses entering the UK for short-term events or training.

• Authorisation by Declaration (AbD) is commonly used but requires a financial guarantee.
• From 11 July 2022, HMRC allows freight forwarders or customs agents to apply for full TA authorisation on behalf of multiple owners, reducing the financial and administrative burden.

Postponed VAT Accounting (PVA)

If TA is not used, VAT-registered UK businesses should instruct customs agents to use PVA which allows import VAT to be accounted for on the VAT return rather than paid upfront. This applies to imports from both the EU and non-EU countries.

• The import VAT is declared as output tax (Box 1) and reclaimed as input tax (Box 4) on the same return, creating a cash-neutral position.

Valuation for VAT Purposes

When horses are imported temporarily and no sale has occurred, valuation for VAT can be complex:

• HMRC accepts insured value or a reasonable estimate based on recent sales or declarations.
• For racehorses, simplified valuation rules may apply, especially when imported for auction or under the "docket system".

Documentation and Compliance

Movements must be supported by:

• A valid EORI number (linked to the VAT number).
• Export/import declarations.
• Equine health certificates, veterinary checks, and transporter authorisations.
• ATA Carnets (obtained from a Chamber of Commerce) will simplify temporary movements, especially for competition horses by removing the need for customs import and export entries.

Key Considerations

• Ensure clear evidence of temporary intent, failure to re-export within the permitted period may trigger VAT and duty liabilities.
• Maintain accurate records of movements, values, and authorisations.
• Engage experienced customs agents familiar with equine logistics and VAT procedures.

To discuss this in further detail, please get in touch with one of our Indirect Tax Services team members.