Game shooting is a borderline business with 33% of commercial shoots in the UK making a loss last year. This makes it very important for shoot owners and managers to understand the true cost of certain aspects of their enterprise.
For example, a head keeper can expect to earn £22,000 plus benefits – and these benefits can soon add up to take the overall cost close to £40,000.
Most keepers are provided with a house and a vehicle. Assuming the house could have been let for £600/month (much more in some areas) and the vehicle costs £4,000 year to run, that takes the cost of the gamekeeper to £33,200 before other items a keepers’ day, mobile phone or dog allowance are accounted for.
It is also vital to know the cost per bird shot rather than per bird put down. On average, only about 40% of birds put down are actually shot.
Commercial shoots must work this cost out so they know what to charge to be profitable.
The broad range of shoots benchmarked through our service have a costbird shot of between £26 and £29. In turn they will charge £3032 per bird shot, making them profitable.
Clients who run a shoot for a hobby are also becoming increasingly conscious of the true costs of their sport and many like to know how these compare with buying a day on a commercial shoot.
Another area commonly overlooked is shoot rent. Instead of paying a rent per acre for the sporting rights, many commercial shoots provide free days to the landowner but they should calculate the true cost of this by breaking it down to cost per acre.
When this is done, shoots can find that they are overpaying by more than triple compared with the value of the shooting rights.
The game shooting industry provides employment and diversification opportunities for businesses in remote parts of the country where other options are limited.
Game shooting is being increasingly targeted by HMRC to close any loopholes and ensure those enjoying the sport toe the line on tax affairs.
Like all businesses, shoots need to register for VAT if annual turnover exceed £79,000.
Less well known is the fact that landowners who lease shooting rights to a third party should charge VAT, as the “right to take game” is chargeable to the 20% rate.
This can be overlooked as many land rents are exempt from VAT. Even if the shoot rent is paid for in shooting days given to the landlord, VAT on the supply of shooting rights should still be charged, based on a realistic market rate.
Farmers who run a shoot as part of their diversification and are VAT registered are likely to be flagged up on HMRC’s system if they fail to charge VAT on shoot income.
However, it is possible to run a shoot as a non-profit making club as long as there is no commercial element to the arrangement.
The shoot does not have to charge VAT on the days sold so it can be more competitive in the pricing of members’ subscriptions.
Charlie Mack is an agricultural business and sporting consultant with Brown & Co’s Norwich office