Registered for VAT? You must add VAT onto your traders and caterers pitch fee
If you are registered for VAT are you charging your traders, caterers and market stalls the right amount? HM Revenue & Customs (HMRC) wants their share of the cake.
HMRC VAT office has made a ruling, supported by a test case in English courts, resulting in the need to charge VAT at the standard rate (currently 20% of total figure at March 2017) on rent and concession/tender rates paid by traders to festivals and events that are registered for VAT e.g. a £100 stall rent will now be £100 + VAT = £120. This is of no benefit to the festival / event organiser, it is a TAX by HMRC.
Don’t get it wrong. Add VAT to the rent or concession and declare it with your VAT return. Many caterers and traders are also registered for VAT so will be able to claim it back. Those that are not still have to pay it to you (they are the end user).
So, to clarify, if your event is VAT registered you MUST pay VAT on top of the fee to all traders. If you are not VAT registered you don’t.
AFO: 14th Mar 2017 14:24:00