People and Business: Wriggling out

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The Independent Online
FROM HIGH ART to maggots. Ernst's accountancy rivals at PricewaterhouseCoopers are concerned by the VATman's decision on whether maggots sold as live fishing bait from vending machines could be considered to be food because fish eat them, and thus zero-rated for VAT purposes.

Deborah Sharp, a VAT specialist at PWC, says it is a serious issue: "It is well known that food for humans is mostly zero-rated. It is perhaps less well known that certain animal feeding stuffs also benefit from this relief from VAT."

In the event a recent VAT tribunal concluded that the purpose of the maggots was not to feed the fish, but rather to lure them to the fisherman, says Ms Sharp. "As a result of the ruling, sales of all such maggots will be subject to VAT at 17.5 per cent."