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Organising a Trade Fair? Do You Understand the Tax Implications?

In an important decision for trade fair organisers, a tribunal has ruled that the provision of pitches to exhibitors is not an exempt supply of a licence to occupy land and that rents charged are thus subject to VAT at the standard rate.

A company which organised antiques and collectors’ fairs across the country had long operated on the basis that, while VAT was payable on entrance fees paid by the public, pitch rents were free from the tax by virtue of the Value Added Tax Act 1994, which provides an exemption in respect of the letting of immovable property. However, HM Revenue and Customs took a different view of the law.

In dismissing the company’s appeal, the First-tier Tribunal found that the social and economic reality was that sellers and exhibitors were not paying for the right to occupy land but for the opportunity to participate in thriving and expertly run fairs which offered plentiful trade and high customer footfall.