Exhibition charges – a shift in policy from HMRC
It is common for many membership organisations such as learned societies to hold annual conferences for their members at which papers will be presented, and various topics discussed.
Often exhibitors will attend these conferences and hire a space to erect a stand and display their products. The received wisdom, until now, has been that if the conference organiser has granted the exhibitor a right to occupy a defined site in the conference venue that this was the grant of a licence to occupy land.
As such it would have been exempt from VAT, unless the conference organiser has made an option to tax over the land in question, in which case the supply was standard-rated.
Where no defined site was granted and an exhibitor simply turned up and could be moved to whatever site was available, this had traditionally always been regarded as a standard-rated supply.
The recent First-tier Tax Tribunal case of International Antiques and Collectors Fairs Limited indicates a shift in policy from HMRC that has been supported by the Courts. The Appellant Company organises antiques fairs at various sites around the country, such as Newbury racecourse, the Newark and Nottingham Showground, etc.
It hires these venues from the owners of the land and then lets out specific plots to exhibitors. The services provided are relatively basic comprising a marked out and numbered plot, in some cases an electrical power socket limited to 300W to be used for lighting and a trestle table, and in some cases also a marquee which is erected by the company.
In 2012, HMRC issued Revenue & Customs Brief 22/12 which was titled “The place of supply of services connected to land”. This Brief contained the passage “Currently, HMRC regards the supply of specific stand space at an exhibition or conference as a supply of land. This policy will continue where the service is restricted to the mere supply of space without any accompanying services.”.
This seemingly confirms what people believed the position to be. However, it went on to say that “where stand space is provided with accompanying services as a package, this package (stand and services) will no longer be seen as a supply of land with land related services……Accompanying services provided as part of a package includes such things as the design and erection of a temporary stand, security, power, telecommunications, hire of machinery or publicity material.”.
Drawing on this and other recent case law, HMRC argued that the Appellant Company did not simply let land and add value to it through the provision of the limited services it provided, but rather that the service was the provision of a fully organised and marketed antiques fair.
Although the Tribunal specifically commented that it did not believe that “any blame can attach to the Company or its officers or advisers” for not spotting that there might be a problem in continuing the previous policy following the release of the Revenue & Customs Brief 22/12 because of the title of the Brief, it nevertheless agreed with HMRC that the supply was not just the grant of an interest in land, and was, in fact, a taxable supply of services.
With many conferences, the services provided by the conference organiser will be even more limited than was the case here, because the conference venue will already be provided and there would be no need to erect marquees, but it is likely that electricity will be provided, and the logic of the decision seems to suggest that HMRC could argue that the conference organiser is supplying a fully organised exhibition, rather than just an interest in land.
Whilst this is only a First-tier decision and not binding on other Tribunals, it is likely that HMRC will take it as a precedent, and there is therefore a risk that continuing to treat such lets as exempt could result in an assessment for VAT. We would therefore recommend that any membership organisation which lets space to exhibitors at its conferences reviews its treatment of the lets.
For further advice or assistance please contact our VAT team.
Tel: +44 20 7969 5611