Supplies of Land – Recent VAT Tribunal Decision

Kati Zombory-Moldovan t/a Craft Carnival (the Appellent)are organisers of craft and garden fairs in which they would supply pitches within the fair to both businesses and private individuals to enable them to sell goods to the public – no VAT was charged on this supply on the understanding that it was a VAT exempt supply of a right to use land, however, VAT was accounted for by Craft Carnival on entrance fees paid by the public.

 

The main bone of contention in this case was whether the supply made was indeed exempt or, as HMRC argued, a supply of ‘the organisation of a craft or garden fair at which stallholders are able to exhibit their wares for sale’ which would be standard-rated for VAT purposes.  The First-Tier Tribunal sided with the Appellant in this instance due to the fact that the stallholders that purchased the pitches of land did so to the exclusion of any other person meaning that the supply should in fact be categorised as an exempt license to occupy land. 

 

This case demonstrates the difficult of identifying the correct VAT treatment of pitches rented at fairs, exhibitions and similar events.  The VAT treatment is often influenced by the nature of the supply and the additional services that may be provided to the exhibitor/trader.

 

To discuss the VAT implications of any land or property transaction you are involved in, call our free VAT helpline today.  

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