An update from Chief Executive Officer, Graham Wilson OBE.
“I make no apology for returning to the issue of whether VAT is chargeable on market licences as the determination of that question is likely to play a big part in the future of our industry. In the last month, representatives of NABMA and NMTF met with HMRC and the Treasury to get some clarity and put forward the markets’ case.
“The issue of VAT came very much into focus following a tribunal case in 2016 when it was held that VAT was chargeable on licences granted to traders at a specialist antiques fayre. The main reason for this decision was that the traders had the benefit of a range of services to support their trading activities. Since that tribunal NABMA has received information from its members that regular markets now appear be targeted by HMRC with the intention of adding VAT to market licences.
“However, there appears to be some confusion about the overall situation because the official advice of HMRC on market licences states that they are exempt from VAT. When challenged about this apparent inconsistency HMRC and the Treasury argued that they are currently updating their advice and that this will be available by the end of the year. We asked that further action be suspended until the new advice is published but this request was rejected.
“Why is all this so important? Over half of market traders are not registered for VAT so this means a twenty per cent increase on current charges. Market charges at many markets have not increased for many years but adding VAT means a straight twenty per cent uplift. Finally, it will make it more difficult for new starters facing a twenty per cent increase in outgoings on stall licences. At a time when markets need all the help they can get the imposition of VAT on market licences could spell the end of some markets.
“NABMA has now instructed Mr Roger Thomas QC to provide further advice on the VAT issue. I feel I must acknowledge the considerable contribution made by Ian Harris, VAT Officer for Leicester City Council, who has been of great assistance in drafting the instructions to Mr Thomas. I would also like to thank Kevin Kelly of Charfleets who provided the introduction to Mr Thomas and assisted with some background information.
“I hope that we will have the advice by early August and, following receipt, I will provide further information.”