Vat and Jaffa cakes – On yer bike, mate

Home » Vat and Jaffa cakes – On yer bike, mate
HMRC-TaxmanThere might be bad news in the pipeline for Open Markets and Carbooters. For years HMRC has stuck to the ‘Tameside’ ruling that the Provider of daystall pitches on a Street Market is not obliged to charge Vat on the licence fees charged. But a recent tax tribunal ruling suggests stalls at a Craft Carnival were not licences but leases – so the organisers should do so. Whether this applies to all Open Markets, Carbooters and Street trading is not clear as yet.

Market Operators are sitting up to pay attention to some nasty implications. HMRC could in theory demand up to four years of Vat back-tax, subject to the zillions of exemptions which Vat legislation allows. This could become an admin. nightmare similar to the famous ‘Jaffa Cakes’ case of 1991 when McVities suggested a Jaffa Cake (note the name) was a chocolate-covered Cake (no Vat payable on cakes) rather than a chocolate-covered Biscuit (Vat is chargeable on biscuits). The Court ruled in favour of McVities.

Lawyers are pondering whether to challenge HMRC about VAT on Market rents. You might be hoping VAT will be repealed after the Brexit vote, but fat chance of that. The UK adopted Vat as a condition of joining the EEC in 1973 and it is the third largest earner for HM Treasury after income tax and NI. Maybe someone will mount a legal challenge to prove that Markets established by Royal Charter in the 15th Century enjoy a Royal prerogative which precedes and obviates subsequent taxes. That’s one for the House of Lords.

Now for something different: The phrase ‘Get on your bike’ means different things to different people. Norman Tebbit MP used it to encourage the work-shy to find employment in the 1980’s. In 1930’s Wales it was allegedly used to encourage boys not to marry their cousin but go find a wife in the next valley.

My latest find in a Market service yard was a ‘Velib’ – the Paris equivalent of a London ‘Boris Bike’. I’m told there are 300,000 French residents in the UK but how did they smuggle a Velib onto a Eurostar? You know what ticket inspectors are like.

You can easily git on yer bike in Oxford, Cambridge and London thanks to Bike share schemes. London has no less than five providers with bike docks located near tourist hotspots such as Borough Market. You can waltz up to the dock, present your credit card and cycle off. For the 11,000 Boris Bikes in London this works fairly well but problems are emerging because new ‘dockless’ bikes can be left anywhere. These are great for getting home after a late night bender with your mates leaves you short of the taxi fare home. They can be abandoned outside your flat but Council are now removing and impounding them for obstructing the pavement.

There are two possible outcomes. Technology-savvy Parisian yoofs have worked out how to bypass the card system then use the bikes for street polo before ceremonially dumping them in the Seine. ‘’ has pulled out of France after announcing ‘The mass destruction of our fleet has become entertainment for underage individuals, encouraged by social media’. It is now a national sport second only to football.

Or maybe TFL, the London Transport Authority will begin licensing the providers to recover costs for Councils. It sounds like another argument similar to the London Mayors ongoing row with Uber.


*First published in Market Trade News 2018