Nelson Events and IACF have announced that they will start charging reduced rate VAT on stands at their fairs from October 1. In a letter to ATG this week, they explain why they have been forced into this move, albeit reluctantly.
The news follows ATG's previous reports regarding a new interpretation of VAT rules by HMRC. HRMC have declared that, from last November, the supply of space at fairs (antiques & collectors, craft, vintage, art deco etc) should be subject to VAT, effectively putting the cost of the stallholders pitch up by 20%.
The letter sates that: "Following a meeting with both legal counsel and our VAT advisors, both Nelson Events and IACF, believe that we have a strong case to defend. We are in the process of combining our efforts to hold a single tribunal and obtain a ruling on the validity of the new VAT rules. However, this process will probably take 12 months before we get a final judgment."
Although they have to account for VAT on pitch sales from last November, they say it would be unfair to ask stallholders to pay VAT charges on past events and will therefore pay this fee on their behalf.
The letter continues: "However, after much discussion, debate and professional advice, both Nelson Events and IACF have taken the decision to start accounting for VAT from October 1, 2013, which means that, reluctantly, we do have to pass on an increase to dealers. We have decided to share some of this extra cost, which means we are limiting the increase to just 12.5% and not the full 20%.
"In the event that we win our fight, every effort will be made to credit anything paid by way of this additional charge back to our customers.
The increase will apply to all new stallholder bookings taken on or after October 1 and also to any existing bookings unpaid at close of business on September 30. Public and trade entry prices will not ne affected, as VAT is already charged.
The letter also calls on organisers, stallholders and visitors to work together to put pressure on HMRC and the Government to halt their plans to implement this new approach to VAT. They have set up a petition website, www.saveourfairs.co.uk, to not only explain the issues in more detail, but to also collect signatures, which they will then pass on to HMRC, MPs and Government ministers.
They have also produced a leaflet that will be distributed at fairs. Those that would like to help distribute the leaflet should email email@example.com. Updates about the campaign will be posted on twitter at @SaveOurFairs