Isabel Hurley

WITH VAT rates on horse auction sales set to almost double to 9% from January for the majority of buyers, auctioneers are anxiously trying to assess the potential impact the new rate may have on horse and pony sales next year.

The Revenue Commissioners have issued a new leaflet detailing the changes following an EU decision on the VAT rates applicable to Ireland’s horse and greyhound sales.

A change to Ireland’s rules was deemed necessary by the European Court of Justice to ensure that the 4.8% livestock rate is only applicable to sales of horses for livestock in general, horses intended to be slaughtered, and horses used in agricultural production.

The new 9% VAT rate will hit approximately 80% of prospective buyers who buy horses for use in sport at the sales. Auction houses have no choice but to pass this 9% VAT rate onto their customers from January 1st next.

The 9% VAT rate will also affect the hire of horses and the supply of greyhounds from January 1st.

Insemination services for all animals including horses, stud nominations and ‘no foal-no fee’ inseminations are currently subject to the 13.5% VAT rate.

Ireland’s sport horse sales are largely powered by Goresbridge and Cavan, both venues attracting a significant number of British and other overseas buyers. Licensed auctioneers fear that the VAT changes could lead to a rise in the number of private deals being done and a spike in cash trade at the fairs.

Cavan’s Stuart Clarke told The Irish Field: “This VAT change was coming down the road for a while but it’s disappointing that it’s here and will have another effect on the industry. It’s not coming at a great time, the sport horse industry has been struggling in recent years and only started to improve this year. It’s going to be another expense for buyers, really doubling up on their VAT expense. We will have to wait and see what effect it has. It’s unfair in that a lot of the fairs, where it’s all cash, get away with it. However, people must remember that when they buy at the sales houses, the sales warranty is very substantial now. All of the horses sold at Cavan have genuine passports, all of the checking is done, the veterinary and back-up services are all in place for buyers.”

CONNEMARA MARKET

In Clifden, where some 2,800 Connemara ponies were sold through the ring this year, auctioneer Padraig Heanue told The Irish Field: “We have quite a specialised market for the Connemara Pony with a lot of British, Dutch and French buyers so I really hope I’m right in thinking the new 9% VAT rate won’t be a significant problem for us next year.

“I’d estimated that as many as 50% of the ponies we sell go abroad – Britain, France and Holland are the big markets for the Connemara Pony. The other 50% of the market are Irish buyers so there may well be some adjustment there, we’ll just have to see there,’’ said Heanue.