A LONG-ESTABLISHED Suffolk dog food manufacturer could be in line for a windfall running into millions of pounds after inflicting a stinging legal defeat on HM Revenue and Customs.

Generations of the Skinner family have been millers in Stradbroke, Eye, for 200 years, but a tribunal ruling must surely mark a high point in the long family history.

Roger Skinner has successfully made dog foods in the village since the 1970s through his eponymous company, Roger Skinner Ltd.

The company even won the Gundog Product of the Year category at the 2012 IPC Shooting Industry Awards in June for its Field & Trial Turkey & Rice.

However, it has now emerged that, over a period of almost 30 years between 1980 and 2009, the company paid out almost �7million in VAT, blissfully unaware that its products could have been viewed as exempt from the tax.

Now, despite protestations from the tax authorities, tax tribunal judge Barbara Mosedale has accepted that four of the company’s dog foods – now all out of production – should have been zero-rated for VAT because they were targeted at gun and working dogs, not pets.

The ruling opens the way for the company to seek a bumper tax rebate.

Judge Mosedale said early packaging used by Skinner’s bore a picture of a golden retriever, the archetypal gun dog. The bags had “a very agricultural presentation” and the products were advertised in working dog titles like the Shooting Times, The Field and Working Dog.

The company’s dog foods were marketed at field trials and country shows – it also had a Home Office contract to provide food for prison dogs – and the judge accepted that consumers of Skinner’s own label products “were mainly if not entirely owners of gun dogs and working dogs”.

Despite HMRC arguments that the company’s products were marketed as suitable for “all dogs” and could have been bought by pet owners, the judge ruled that they had been specifically labelled and marketed for working dogs and fell within the category of “animal feeding stuffs” that are zero-rated for VAT.

The company may still face arguments from HMRC that its VAT refund claims were put in too late and as to the value of any rebates and interest due.

Those issues will be the subject of a further tribunal hearing if settlement terms are not now agreed.

A spokesman for Skinners declined to comment on the case last night.