HMRC agrees to negotiate over events industry tax issues

HMRC has agreed to begin a process of negotiation with Eventia to produce fresh guidance on tax issues, including TOMS, for the events industry.

Saffery Champness partner David Bennett speaks at C&IT Agency Forum on 6 September
Saffery Champness partner David Bennett speaks at C&IT Agency Forum on 6 September

In a meeting held between HMRC representatives and Saffery Champness partner David Bennett yesterday (5 September), agreement was reached on the need to clarify tax issues for the events industry.

"HMRC has agreed it would be beneficial to start a process of negotiation, which will hopefully lead to a guidance note that will set out for the first time in detail how VAT applies to events in various different situations," he said.

Bennett added he was currently advising three small agencies, each with less than 12 staff, after HMRC had challenged them on their TOMS status.

Bennett told C&IT that "we will do no one any favours if we just accept TOMS should be applied in a range of circumstances, other than to clarify the uncertainty point".

Currently, agencies are caught by the Tour Operators' Margin Scheme (TOMS) – and cannot claim back VAT - if the event includes the agency selling any of the following six elements:

  • Accommodation
  • Passenger transport
  • Car hire
  • Trips/excursions
  • Services of a guide
  • Use of airport lounges

"We need to have a process of discussion with HMRC, and with the industry, particularly event agencies who can give commercial expertise on these issues," he said.

An initial meeting is expected to take place between HMRC and Eventia in the autumn, with negotiation over a series of tax issues to follow and, ultimately, production of a guidance note.

"TOMS is only one aspect of tax for events, and the nature of the process is to help agencies understand their obligations, and put processes in place to protect their own and clients' interests," added Bennett.

Bennett was speaking at C&IT Agency Forum today (6 September), alongside Eventia head of the regulation committee Brian Kirsch and Olswang partner Brian McDonnell.

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