Charging VAT on site space at shows?

[thriftylassie]

Hi there,

My company runs a country show once a year. We sell units of "open space" trade-stand pitches to various shops and craftspeople at £75 plus VAT per unit, or £100 + VAT if they are in a marquee covered area such as the food hall.

Over the past couple of years, I've had a few traders questioning whether we should be charging VAT on site space, as some shows seem to charge it, and others don't.

Now, I thought we were doing it fair and square, but obviously, I don't want to be charging our traders VAT if I don't have to.

We make about £40 000pa in total from trade-stands. Many of them are very small businesses and not VAT registered, so, obviously, it would be a help to them if we weren't charging VAT.

Can someone please set me straight on this? I'd appreciate it a lot.

 

[wizzard]

I reckon they're not charged for VAT at other events because possibly the other organisers are not registered for VAT, so they cannot charge it.

You will have to charge VAT whether the small businesses are registered or not.

 

[chalkie99]

We make about £40 000pa in total from trade-stands.

It doesn't matter what you "make" - what counts is your turnover. If that exceeds £73,000 per annum for all your company activities (not just running a show) then you must be registered for and charge VAT.

Is the show organisation the sole activity of your company?

 

[thecyclingartist]

I do a lot of shows and often am charged VAT. Some smaller shows don't presumably because they just don't have a high enough turnover to be VAT registered.

Unless shows space is a service exempt from VAT? But I've been charged it enough by a wide variety of shows over the last decade to think it's not.

Tina.

 

[Scalloway]

IT could depend on whether the owner of the land/building has opted to standard rate for VAT. Land and buildings are normally exempt but an option to tax does exist.

 

[thriftylassie]

Thank you for your replies.
Yes, this show is the only business of our company, and we do turn-over more than £100 000 so we're registered for VAT. Sounds like we're doing everything right though. I just needed to double check.
Thank you all once again for the clarification.

 

[taxattack]

Hi there,

My company runs a country show once a year. We sell units of "open space" trade-stand pitches to various shops and craftspeople at £75 plus VAT per unit, or £100 + VAT if they are in a marquee covered area such as the food hall.

Over the past couple of years, I've had a few traders questioning whether we should be charging VAT on site space, as some shows seem to charge it, and others don't.

Now, I thought we were doing it fair and square, but obviously, I don't want to be charging our traders VAT if I don't have to.

We make about £40 000pa in total from trade-stands. Many of them are very small businesses and not VAT registered, so, obviously, it would be a help to them if we weren't charging VAT.

Can someone please set me straight on this? I'd appreciate it a lot.

This sounds like a licence to occupy land, which is an exempt supply. It may be worth obtaining specific advice from a Vat specialist, because this may have significant implications for your business. For example, if £40k is exempt turnover, you may not need to be registered at all (depending of course on your total turnover).

Chris

 

[Spongebob]

This sounds like a licence to occupy land, which is an exempt supply. It may be worth obtaining specific advice from a Vat specialist, because this may have significant implications for your business. For example, if £40k is exempt turnover, you may not need to be registered at all (depending of course on your total turnover).

Chris

I would certainly look into this. If you do not have to charge VAT but can remain registered and reclaim the VAT on your expenses you are in a win-win situation.

You would also have the opportunity to increase your prices by up to 20% without anyone really noticing and pocket the extra profit!

You could always give a discount to anyone who complained...

 

[taxattack]

I would certainly look into this. If you do not have to charge VAT but can remain registered and reclaim the VAT on your expenses you are in a win-win situation.

You would also have the opportunity to increase your prices by up to 20% without anyone really noticing and pocket the extra profit!

You could always give a discount to anyone who complained...

I agree it's worth investigating, but would caution that if some supplies are exempt, partial exemption would apply and not all input tax would be recoverable.

Chris

 

[thriftylassie]

So it may come under the criteria at this page

customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&propertyType=document&id=HMCE_CL_000154#P60_4113"

sections 2.5 and 2.6?

Reading through them I can see how it would apply. I've e-mailed my accountant about it and will e-mail him again with the above if you all seem to think it might be the case.

Once again, thank you so much for your replies

Edit.... I can't post urls to other sites yet- my apologies for the long url above

 

[Philip Hoyle]

An important factor is whether you're just "renting" them a 10x10 patch of land for THEM to put up THEIR stand and use THEIR generator to power it, or whether you are providing a "service" - i.e. stand and power as well as the space it's put on.

I'd compare it to renting an empty office - which is exempt if the building isn't opted for VAT, as opposed to renting a desk/serviced office where the "rental" includes things like furniture, phone line, heating, cleaning, secretarial services, etc.

Can sometimes be very tricky to draw the line between where it is simply the occupation of land/property and where it becomes a service.

 

[thriftylassie]

An important factor is whether you're just "renting" them a 10x10 patch of land for THEM to put up THEIR stand and use THEIR generator to power it, or whether you are providing a "service" - i.e. stand and power as well as the space it's put on.

Can sometimes be very tricky to draw the line between where it is simply the occupation of land/property and where it becomes a service.

I see..... Ok, I'll break it down so you can see what happens in reality.

On our application form, trader tick the box saying how much space they need. In reality, most of them just pay ground rent, bring their own marquee, and bring their own generator if they need one.

Under that though are other options, so if they want us to supply electricity, chairs, tables, a marquee, they tick those boxes too.

The food hall differs because we supply a large marquee and then they buy ground rent within that.

Then they add the total and pay VAT on the whole shebang.

Have I understood correctly that while the ground rent may be VAT free, the other things such if they decide to buy electricity from us, or tables etc. I should be charging on these?
As I said, in reality, most of the traders just pay ground rent and bring their own marquees etc.

I could alter our application form to reflect that.

Does it affect the food-hall differently given that the ground rent we are selling is within a marquee we supply?