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New VAT Rules For Exhibition Stands

The Association of Event Organisers has this month established a change in VAT policy for exhibition stands with Her Majesty’s Revenue and Customs (HMRC). After extensive talks with the European Policy Committee, important changes have now been made to the classification of exhibition stands which will change the way VAT is calculated and charged for many non-UK EU countries, and for those who make use of exhibition stands at conferences and other events.

Previously, HMRC regarded the allocation of stand space at exhibitions and other such events as a land supply, where there were no associated services in conjunction. The new classification means that, when stand space is allocated within a conference environment, with accompanying services as a package, the stand will no longer be seen as a land supply, but will be taxed in accordance with general place of supply rules when supplied to business customers. This rule is an important concept, as it is used to determine the country in which VAT is due, so as to avoid some businesses either paying double the VAT, or not paying any at all. The accompanying services which fall under this new ‘supply rules’ bracket include security, power, telecommunications, machinery or equipment hire and distribution of publicity material, all of which cover the vast majority of conference displays and stands.

The important new classification of exhibition stands (including regular and giant banner stands, pop up stands and shell clad schemes) means that UK exhibition organisers are now able to ‘reverse charge’ EU exhibitors from outside the UK. In cases where services have been supplied by a company in the UK to another country, which is a member of the EU, no UK VAT is charged by the supplier. The customer purchasing the services from the UK then needs to ‘reverse charge’ to account for the VAT in their own country; this is to prevent mix-ups which have resulted in some businesses paying double and some paying nothing.

Businesses may adopt the new taxation rules immediately if they so wish, or apply the treatment for a period of up to three months so that they can make the necessary adjustments to their systems, budgets and working processes. Any VAT declared under the earlier HMRC policies, which would not have been applied under the new rules, is not refundable, unless customers can prove that they have not recovered the VAT charge. At HMRC’s discretion, the defence of unjust enrichment will be considered and a decision will be made whether to repay the VAT based on individual cases.

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