Grain prices creeping up.

[Rodcx500z]

There is no vat on the grain from the cheshire buying group

 

[AJA]

Rules are here.
https://www.gov.uk/hmrc-internal-manuals/vat-food/vfood9000I'd argue that a 25kg sack is not a retail pack, but probably safer for the seller to charge/pay it anyway.

 

[Agentgonzo]

Er, that's not setting the bar very high, now, is it!

It's a lot higher than it currently is!

 

[AJA]

It's like working dog food. No VAT on this but VAT on normal dog food. It's why half the dog food in the shop is labeled for working dogs.

 

[Agentgonzo]

There is no vat on the grain from the cheshire buying group

Then you, and the vendor are breaking the law.

 

[user 4749]

MM and GEB can hardly argue that its not for homebrewing so it will have VAT added .

 

[user 4749]

If I take up bread making will I pay VAT !

 

[Stu's Brews]

If I take up bread making will I pay VAT !

Unless you are a VAT-registered business, then yes.

 

[AJA]

If I take up bread making will I pay VAT !

No, flour and bread are zero rated.

 

[Stu's Brews]

No, flour and bread are zero rated.

Good catch @AJA; items exempt from VAT:
https://www.gov.uk/guidance/rates-of-vat-on-different-goods-and-services
If you're a baker you'd have to pay VAT on things like packaging but most of the raw ingredients are tax exempt ('non-food additives' are not exempt).

 

[obscure]

Good catch @AJA; items exempt from VAT:
https://www.gov.uk/guidance/rates-of-vat-on-different-goods-and-services
If you're a baker you'd have to pay VAT on things like packaging but most of the raw ingredients are tax exempt ('non-food additives' are not exempt).

The pedantic accountant in me wants to point out that bread and flour are zero rated not exempt (it seems the same but it really isn‘t) zero rated is still means VAT is ‘charged’ its just at zero percent, so your VAT registered baker could recover any input VAT paid, if a bakery was VAT exempt they wouldn’t charge any VAT but likewise could not recover any input VAT paid, which incidentally is a very good reason for a baker to register for VAT even if they are below the threshold

 

[Dazzelknight]

I just ordered grain from GEB and was charge VAT ,MM charge too

I’m in Jersey so it’s VAT free, (not that I save anything because that just offsets the delivery).. but it’s a 33% rise in just over 2 year on grain.

 

[Leon103]

How very British of us to propose excuses for profiteering. The fact is, that in most cases, every step of the supply chain covers its costs. Maintains its margins as a percentage of costs. Adds a little bit more, just in case. And the end users cops the lot while shedding a tear for the straightened times of the supplier. Pathetic!
We need a bit (a lot) more innovation and thinking outside the box! Sure, there are rises that'll need to be passed on. Sure, some small businesses will go to the wall. But let's keep a bit of common sense shall we.
For example, the price of grain has increased due to issue with Russia. So what? We are net exporters of brewing and distilling barley. There's no reason for barley to go up except for fertiliser costs. How do organic producers manage. Don't we have an excess of cattle and sheep manure? Aren't we an island with loads of seaweed on our storm tossed beaches? Haven't we got the wherewithall to make our own fertiliser factories? The price of gas has peaked and started to fall, so energy is still dear, but not as bad as it might have been. So why is Minch Malt, a local Irish business, charging THBC nearly double if it's not profiteering? I could go on about hops in much the same way, but I'm not aware that there's an issue with hops just yet.

And another thing. When things get back to normal and Putin is put in his place, does anyone imagine that prices will slide back again? Dream on.

Well history does show that prices come down after an inflated market. Issue with the above is you failed to consider a number of other processes that have also seen a rise in cost. Transport, energy/kiln. Staff, tax as come back up from covid lows.

 

[Leon103]

Then you, and the vendor are breaking the law.

Vat is only payable by a business after passing certain thresholds.

 

[chopps]

Been down this road a few times now....
FP is not VAT registered so we pay VAT on purchases and dont charge VAT on sales.
For commercial brewing ingredients, most are zero rated so VAT is not on the invoice from the supplier, or it's a zero value line.

For obvious homebrewing products, the standard VAT rating applies to

• kits for home brewing, wine making etc;
• retail packs of hopped malt extract, malted barley, roasted barley, hops, special wine and brewer’s yeasts, wine or beer concentrates and similar products specialised to home-brewing or wine making; and
• retail packs of foods which are not specialised to home-brewing or wine-making, such as fresh, dried or tinned fruit and fruit juices, barley, glucose and plain malt extract, if they are held out for sale (ie packaged and labelled) for home brewing or wine making.

So... I often see the argument that if it's in a sack, in bulk, it should be zero rated.
There might be some interpretation, but I think it's clear that if a business sells malt that is offered as a homebrew product then it doesn't matter how it's packed, it's standard rated :

VAT notice 701/14

3.7.4 Ingredients for home beer and wine making​

Products that are canned, bottled, packaged or prepared for use in home wine or beer making are standard-rated. This includes:

• kits for home brewing, wine making and so on
• retail packs of hopped malt extract, malted barley, roasted barley, hops
• special wine and brewers’ yeasts
• grape concentrates
• retail packs of foods, which are specialised to home wine making, such as dried elderberries or sloes for making country wines

You must also standard rate any general food product that you hold out for sale specifically for home wine making or brewing, such as fresh, dried or canned fruit, fruit juices and concentrates, barley, glucose and plant malt extract. In this context, you hold them out for sale for home brewing and wine making if you:

• sell them through a retail outlet that specialises in home brewing and wine making materials
• sell them in the home brewing and wine making department or section of a general outlet
• label, advertise or otherwise display them as materials for home brewing or wine making, or provide with them or on their packaging any brewing or wine making recipes, or instructions for using them in the making of beer or wine (for example, the amount of sugar required for their fermentation or the type of yeast to be used)

 

[chopps]

Then you, and the vendor are breaking the law.

Explain please? You can't charge VAT unless you're a VAT registered business. Well you can, but there's no means to pass it on to HMRC. So you'd just be charging 20% more and keeping it.

 

[borischarlton]

Just want to clear up the VAT situation, at least on brewing ingredients, bread is a different subject.
VAT is charged on everything, malt hops yeast, flavourings. Anything that is deemed to be added into home brew should incur VAT. Even items that don't incur VAT if purchased in a supermarket such as spices, incur VAT if being sold through a home brew outlet. When being sold to a brewery most ingredients are zero rated. Delivery always incurs VAT.

If an outlet is running below the VAT threshold then obviously they don't charge VAT but, they will need to be paying VAT on the stock they are purchasing which they then can't claim back.

 

[Rodcx500z]

Then you, and the vendor are breaking the law.

How did i break the law

 

[Clarence]

Well history does show that prices come down after an inflated market. Issue with the above is you failed to consider a number of other processes that have also seen a rise in cost. Transport, energy/kiln. Staff, tax as come back up from covid lows.

No I don't think so. I don't deny there are rises in the pipeline. And I'm sure all the employees along the chain are not benefiting from a pay rise. None of that counts for a near doubling in material costs and THBC haven't increased their transport costs at all. It's a case of everyone wanting to take as big a slice as they think they can get away with and we, the end used, get shafted as usual.

 

[LeeH]

What's this scaremongering again? Every year the same thread about grains and co2. Just checked my account at brewers select, the prices increased less than the inflation was last year.

What is their postage rate?