Animal Aid

A law unto themselves - the game shooting industry under the spotlight (part 4)

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How the bird shooting industry cheats the public purse

Exaggerated claims about the economic benefits of shooting is another aspect of the shooting industry's self-serving deceit. Meanwhile, it remains deafeningly silent on the pertinent question of tax evasion.

The PACEC Study

The latest industry-financed study into the economics of 'sport shooting' in the UK is the Public and Corporate Economic Consultants (PACEC) survey 'into the impact of sporting shooting to the UK economy and the wider benefits of the industry'.

PACEC is a Cambridge-based economic consultancy firm. It was used by the Countryside Alliance in the months running up to the passage of the Hunting Bill through parliament and issued a report that forecast significant job losses in the event of a hunting ban. This conclusion flew in the face of all disinterested opinion. For example, the BBC's Economics Editor, Evan Davis, observed in February 2005: 'No wonder that five years ago the Burns Report [a government-instigated initiative] looked at hunting, and concluded that, in the big picture, the economic effects of a ban would not be substantial. The bulk of jobs in rural areas are not in hunting, they are actually in services - just like everywhere else.'

Unsurprisingly, Lord Burns and Evan Davis have proved more accurate than PACEC. Nonetheless, its findings obviously pleased the Countryside Alliance sufficiently for it to have thrown more 'research' in PACEC's direction. In the last quarter of 2005, the CA joined forces with fellow bloodsports enthusiasts, the British Association for Shooting and Conservation and the Country Land and Business Association to fund the new shooting study. The CA was unabashed in announcing the purpose of the allegedly independent survey. According to a September 2005 statement on its website, the project 'will be vital in our ongoing campaign to promote and protect shooting'.

Published in September 2006, the PACEC report has much in common with its predecessors in that its 'findings' make an environmental and economic case overwhelmingly in favour of shooting. Of 10,000 questionnaires dispatched to members of shooting organisations, only 2,000 were returned - many of them incomplete. From this unimpressive response, PACEC concluded that 61,000 people provide shooting and 480,000 take part.

Of 50 Police Forces in Britain, only eight agreed to send questionnaires to shotgun licence holders in their areas. This produced responses from just 101 individuals, a tiny fraction of the 654,000 licence holders throughout the country. No police force in the South West of England, where most shooting takes place, agreed to participate in the survey.

What is the true worth of game shooting?

It is impossible for any single agency to come up with an accurate assessment as to the worth of game shooting because - as we have seen - the industry is largely unregulated and unmonitored. While the PACEC report claims shooting currently contributes £1.6 billion every year to the British economy, five years ago, BASC was claiming 'just' £623 million.32

Less trumpeted are the ways in which industry practitioners are depriving the public purse of tax revenue by exploiting a combination of legal loopholes and lack of regulation. The PACEC report,for instance,conspicuously failed to address the level of public subsidy and tax avoidance that contributes to the game industry's profits. While just a tiny proportion of shoot-related income is derived from the sale of shot birds, the game industry, nonetheless, gains from tax concessions and subsidies granted only to agriculture and food production.

A taxing problem

How does the Shooting Industry Avoid and Evade Taxation? Under UK law, agricultural land and buildings are not assessed for business rates. Many shooting estates have sought to benefit from this concession to farmers, even though their businesses are not primarily concerned with food production. Indeed, the shooting industry concedes that only 40 per cent of released pheasants are ever recovered by shooting - and many of these do not enter the food chain either.


The vast majority of profits come not from the sale of the shot birds but from people who pay to kill them. The truth of this statement is demonstrated by recent surveys of shooting operators conducted by the CA and by the BASC.33 The best price obtained for shot pheasants by shoots selling directly to retail outlets was £1.60 each, while dealers were offering to pay shoot operators just half that amount to take the killed birds. The equivalent prices for partridges were just £1.54 and 54 pence respectively. Contrast these amounts with the costs of rearing one pheasant (industry estimates range from £12.50 to £25). According to The Spectator, 'Wealthy bankers and brokers will think nothing of paying upwards of £10,000 for a corporate day involving eight Guns'.34 It is clear that shooting is a leisure activity and not a method of food production. Those who convert land for game rearing or shooting should attract the same valuation for business rates as would theme park owners.

Animal Aid first brought this anomaly to the attention of the Valuation Office Agency (a branch of HM Revenue and Customs) in 2000, reporting Ray Holden's Hy-Fly bird production enterprise and scores of others. This will lead to millions of pounds worth of business rates being received for the public good. Animal Aid's role in awakening the Treasury's interest was acknowledged in 2002 by Dawn Primarolo, the Minister responsible for the Valuation Office.35

At the time, the Minister believed that there were 400 game farms in the United Kingdom, with only 85 registered on the business rates valuation lists for 2002. But progress in putting things right has been slow. By July 2005, a total of 128 game farms, of which 120 were in England and eight in Wales, had been registered for business rates.36

All this, however, should now have changed. As part of the measures to combat bird flu, DEFRA compiled a national 'poultry register' earlier this year. All game farms with more than 50 birds are legally required to submit details.

In August 2006, Animal Aid wrote to the Valuation Office Agency (VOA) to emphasise that there is now no reason for any game bird producer to escape payment of rates, since the Agency could simply ask DEFRA for the list of all such businesses, and those businesses could then be valued and sent a rates bill. In an extraordinary reply, the VOA claimed that it cannot pursue this course since DEFRA and the State Veterinary Service say that the Data Protection Act won't allow them to release information from the poultry register.

Having taken legal advice, we have been in further correspondence with the VOA, pointing out that if DEFRA is indeed withholding the information then it is acting illegally because the Data Protection Act (1998) specifically states that personal data can be disclosed when to do so could result in the collection of due taxes. The matter remains unresolved as this report goes to press.


VAT rules on animals and food are complex and illogical. VAT is not applied when farmers sell their food products. In addition, farmers can claim back any VAT they have incurred (known as 'input' VAT) when purchasing the goods and services needed to produce the food. However, the rules aimed at exempting food from VAT also apply, absurdly, to the sale of a rabbit from a pet shop. This is because any animal 'commonly eaten' in Britain is not subject to VAT, regardless of the actual purpose for which they are sold.

The shooting industry takes advantage of this gaping loophole by insisting that pheasants and partridges are 'commonly eaten'... even though the principal reason they are bred is to be shot for 'sport'.


Irrespective of this anomaly, the selling of shooting rights - an important financial transaction for a landowner - is subject to income tax and VAT. The problem is that the confused rules give great scope for avoidance. Unlike business rates, any financial dealings are a private matter between individuals and HM Revenue and Customs (HMRC), so it is impossible to assess figures that are not in the public domain. Nonetheless, the scope for VAT evasion is considerable, as indicated by a letter sent in April 2006 to members of the shooting community by HMRC. It warns shooters that 'tax irregularities are occurring across the country' and announces a significant investigation into the various ways in which the shooting industry seeks to act improperly. HMRC's concerns closely mirror those that have been raised by Animal Aid for some years, and its decision to act against shooting industry fraud follows detailed correspondence and a lengthy meeting between HMRC and Animal Aid.

Six ways for the shooting industry to avoid paying tax

The numbered malpractices are quoted directly from HMRC's April 2006 letter to shooters. Animal Aid's explanations are added below.

  1. 'Commercial shooting has been variously misdescribed as private shooting, non-profit making club activity or the supply of zero-rated birds.'

    Commercial shooting is for profit and subject to taxation, while with private shooting the costs are borne by members of a syndicate on a private and individual basis and are not taxable.

  2. 'Exchanging supplies of VATable shooting for zero-rated or other supplies by way of barter, with neither transaction recorded in business records.'

    This occurs when land owners exchange shooting for expertise or services from other land owners or suppliers. The transactions are on agreement and trust, with no financial exchange and therefore cannot be taxed. Examples are heavy excavation, road surfacing and labour.

    While it is not illegal to barter, any bartering related to business activity must be recorded and made visible for taxation.

  3. 'Failure to register for VAT'

    All businesses with a turnover exceeding £61,000 must register for VAT. Since game shooting can cost in excess of £1000 per person per day, there are few commercial shoots that fall beneath this threshold.

  4. 'Artificial separation of business activities to stay below VAT registration limits'

    A shoot operator might separate shooting from accommodation and entertainment. By keeping both accounts below the VAT threshold of £61,000, he need not register either business for VAT. He can sell his shooting cheaper (less 17.5%) but should not be able to claim back input VAT. However, if he is also a farmer, he might pass his input expenses through his agricultural accounts and get the VAT back on money spent on materials such as fencing that he has purchased for a non-agricultural purpose.

    Another 'scam' is to 'sell' shot birds to the shooters at an inflated price - say, £5 each. The shooter never takes possession of the shot birds but the visible cost of the actual shooting is reduced. The birds are 'food' and exempt from output VAT. This manoeuvre may bring the value of the shooting turnover to less than the £61,000 VAT threshold.

  5. 'Under recording of sales values'

    In addition to under recording the shooting sold, there is an unaccounted by-product. At most, only 40 per cent of released birds are ever recovered by shooting. Since the cost of producing the game may already have been covered in the cost of the shooting, the undisclosed recovered game is a windfall that can be sold on the black market.

  6. 'VAT and income tax irregularities on claims for private expenditure'

    This might occur when a landowner owns a shoot and has his friends around in a syndicate to enjoy the shooting. He passes the expense of running the shoot through his agricultural books. This has the effect of artificially reducing his farm profits and reduces his liability for income tax. The input VAT he has paid on shooting supplies is also recovered against his agricultural business. He and his friends get free shooting.

    The landowner might even sell the shooting to a group of friends. He would then be running a separate shooting business with no overheads, no taxation and no accountability.

As well as taking unfair advantage of the above opportunities, shooting industry practitioners are also grabbing taxpayer-funded land subsidies.

Farming land is often turned over completely to shooting. Cover crops and release enclosures are introduced and roads are built for shooters to gain access. But the land itself is still registered as agricultural. This means that, in addition to avoiding valuation for rates, the land will attract agricultural subsidy under the CAP and the recently introduced single farm payment scheme. One of Britain's foremost landowners and shooters, the Duke of Westminster, received £799,000 of taxpayers' funds during the period 2003-2005.37

What is the Government doing about it?

Due in no small measure to Animal Aid's previous reports, HMRC is at last taking a more robust stance with VAT and income tax evasion in the shooting industry. In the previously mentioned April 2006 letter to members of the Country Land and Business Association, Brian Spooner of HMRC warned the membership that, to deal with the irregularities that had been identified, the Revenue would be enforcing the law and making unheralded visits.38

This more critical approach contrasts markedly with the hand-in-glove approach of DEFRA. In addition to his general praise of the industry, ex- Rural Affairs Minister Jim Knight was linked with the industry's inflated estimates of the industry's value to the British economy.39 Knight's old Department - as we have seen - also appears to be withholding from the Valuation Office Agency (VOA) key information that would allow the VOA to bring into line those many bird-producing businesses that are currently dodging paying business rates.

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