Pitch fees for Christmas markets – VAT-able or not?
Farmers, landowners and rural businesses are increasingly making fields or other space available to run events, festivals, markets and car boot sales. But there has been some uncertainty over whether the charges for pitches at such events should be exempt from VAT or VAT-able at 20 per cent.
David McGeachy, a Partner in UK top 20 Chartered Accountants Saffery Champness, also a VAT specialist and a member of the firm’s Landed Estates and Rural Business Group, says:
For many stallholders at, for example, a Christmas market, VAT exemption is important as they will not be VAT registered and will be unable to reclaim VAT on the charge. On the other hand, if the farmer or land owner has made an option to tax on the land then he has no choice but to include VAT in his charges to them.
There have however been two Tax Tribunal cases resulting in opposing interpretations, one being that of International Antique and Collectors Fairs (IACF) and the other being Craft Carnival, neither of which clarifies the situation.
In Craft Carnival the Tribunal deemed that the landowner’s supply of pitches to stallholders should be VAT exempt even though in addition to granting a pitch to the stallholder, advertising, electricity, security, car parking and other services were also provided.
HMRC argued that the supply of pitches should be taxable because the package of services made available to stallholders demonstrated that there was more than a passive activity of just making land available. The Tribunal disagreed however and HMRC is appealing the judgment.
In the IACF case, the Tribunal took the opposite view saying that the sophistication and professional organisation of the event meant that pitch fees should be VAT-able as stallholders were primarily paying to participate at the fair rather than paying for a license to occupy a pitch.
David McGeachy says:
In the light of these two cases, rural businesses that are relying on a VAT exemption when they hire out pitches for such events should consider the outcome very carefully, as they may find that HMRC might determine that VAT should have been charged.
As yet HMRC has no clear guidance on whether and under what circumstances VAT should be charged on pitch fees for such events and, until these cases are finally concluded, that uncertainty looks set to continue – long after this Christmas Market season is over.
Later weaning helps reduce piglet mortality
Weaning piglets later and heavier can help to reduce piglet mortality. Allowing the piglets to be weaned at around 7kg, remaining longer with the sow can help to increase survival rates and reduce piglet mortality according to Mark Jagger from BQP Dalehead Foods.
Speaking at the recent Farm Business Innovation exhibition and seminar in Birmingham, Mr Jagger in outlining the principles behind the BQP pig production system said that the company had developed production based on the five freedoms that were behind the RSPCA’s Freedom Food policy.
With 44,000 breeding sows, finishing around 1000 pigs a week, the welfare of the animals plays an important role in the production systems and the success of production. Mr Jagger said that BQP averaged 23.4 piglets per sow with a feed conversion ratio of 2.31, both well above the national average. The average pre-weaned mortality rate is around 13 per cent and 12.7 per cent for the whole of the EU, but Mr Jagger said that the BQP system has an even lower mortality rate.
Recently in Denmark, the Danish Pig Research Centre announced moves to improve piglet survival rates at weaning. In 2014, the survival rates were 78 per cent – showing a 22 per cent mortality. The Danish industry is now seeking to reduce that to 20 per cent with 80 per cent survival, potentially putting 500,000 more piglets into the market.
However, Mr Jagger said that if the piglets were left with the sow for just a week longer and were weaned at around 7kg rather than 4kg, then survival rates would improve.
He added that the BQP system of straw based non-slatted pens for indoor rearing also help to improve welfare conditions and improve the rearing conditions for the pigs. “Straw based pig production is the way forward. It’s a higher input cost but better welfare,” Mr Jagger said. “All the sows are outdoor, but the finishing accommodation is straw based.”