February 21, 2022


(Or, beware of HMRC describing your facilities as “5-star”)

Quite rightly, HMRC publishes a lot of detailed VAT guidance for taxpayers. You’d hope that this is all clear, unambiguous, and if a taxpayer’s circumstances fall squarely within the guidance, the taxpayer should be able to rely upon it.

This is not always the case, as illustrated by a recent Tribunal Decision.

The guidance in question was HMRC’s VAT Notice 742 which, among other things, deals with charges for a pitch at a car boot sale. The guidance reads that if the site owner has not Opted to Tax, the rental will be exempt.

Buried deeper in the guidance is the observation that if the site operator provides other, value-added goods or services on top, the overall fee could become standard-rated.

This was the issue faced by Rufforth Park Limited (Rufforth Park) which runs car boot sales from a field off the B1224 near Wetherby. I don’t know this part of Yorkshire, but crucially, neither did the HMRC Officer, who never visited the facility and based his decision that there were extensive value-added services on a- rather selective- analysis of the marketing “puff” on Rufforth Park’s website.

The key question is whether the customer just gets to occupy a pitch for a period or is really paying for additional services. With some antiques fairs, for example the site owner undertakes extensive advertising of an event, provides stewards, stands, electricity, etc. to make the event more attractive for sellers, who are thereby persuaded to pay perhaps £200 for a pitch of their choice. Typically, upscale antiques fairs also provide a decent setting to encourage footfall by buyers.

Rufforth Hall charged £9 per car for a pitch in the open, £12 for a pitch under cover in a large shed. No choice of pitch was available, and no tables or lighting/electricity were provided. The basic facilities (toilets, parking etc.) were those of “an ordinary car boot”.

The Officer placed great store in the comment that the site boasted “5 star” catering. In reality, this was a reference to the cleanliness rating, rather than its gourmet menu. A café sold tea, coffee and sausage or bacon rolls, and there were two burger vans.

The Tribunal found as a fact that the facilities were basic and the minimum one would expect at any venue or event.

HMRC also argued that because Rufforth Park had run car boot sales for forty years its reputation is a tangible benefit to stall holders. Rufforth Park advertised the event, and according to HMRC, this was to bring buyers to the site for the benefit of sellers rather than to encourage sellers to pay for a pitch. The advertising was fairly minimal, at about 1% of turnover.

Taking everything into account, the Tribunal agreed with Rufford Park’s view that the £9 fee allowed no room for any added value services, and the income was not subject to VAT.

It is somewhat surprising that HMRC took this case to Tribunal. While I think the Tribunal came to the right result, Rufforth Park was facing a potential six figure sum, and to defend itself, engaged both specialist VAT advisors and Tax Counsel to present its case.

I do hope Rufforth Park had fee protection insurance…


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