National Exhibition Centre Limited v The Commissioners for Her Majesty's Revenue & Customs, TC 02695
| Jurisdiction | UK Non-devolved |
| Judge | Peter KEMPSTER |
| Judgment Date | 07 May 2013 |
| Neutral Citation | [2013] UKFTT 289 (TC) |
| Respondent | The Commissioners for Her Majesty's Revenue & Customs |
| Appellant | National Exhibition Centre Limited |
| Reference | TC 02695 |
| Court | First-tier Tribunal (Tax Chamber) |
[2013] UKFTT 289 (TC)
TC02695
Appeal number: MAN/2004/33
VAT – financial services – exemption – Article 13B(d)(3) Sixth VAT
Directive - Group 9 sch 5 VATA 1994 - booking fees on concert ticket
purchases – identity of supplier - nature of services supplied – whether for
processing of payment by credit and debit cards - whether debt collection
service
FIRST-TIER TRIBUNAL
TAX CHAMBER
NATIONAL EXHIBITION CENTRE LIMITED Appellant
- and -
THE COMMISSIONERS FOR HER MAJESTY’S Respondents
REVENUE & CUSTOMS
TRIBUNAL:
JUDGE PETER KEMPSTER
MR TERENCE BAYLISS
Sitting in public at Birmingham on 20-23 June 2012
Mr Jonathan Peacock QC, instructed by Deloitte LLP, for the Appellant
Mr Alan Bates of counsel, instructed by the General Counsel and Solicitor to
HM Revenue and Customs, for the Respondents
© CROWN COPYRIGHT 2013
DECISION
1. The Appellant (“NEC”) appeals against a decision (“the Disputed Decision”)
dated 27 February 2003 by the Respondents (“HMRC”) to refuse to repay output tax 5 allegedly overpaid in the period 1 August 1999 to 30 April 2002. NEC contends that
the output tax is repayable because certain charges it made to its customers in relation
to ticket booking fees were correctly exempt supplies, being the provision of financial
services.
Facts
10
2. The following facts were either formally agreed between the parties or are
uncontentious.
3. NEC is owned by Birmingham City Council. NEC owns and operates the
National Exhibition Centre and other venues in Birmingham (the LG Arena, the NIA
and the ICC), which are used to stage trade and public exhibitions, sporting events 15 (athletics, tennis etc), concerts (pop, rock, classical etc) and other events including
comedy, ballet and worship.
4. NEC typically hires its venues to third
party
promoters and sells tickets to
customers for the promoters' events on behalf of the promoters through its box office.
Since 2007, NEC’s box office has been branded as "The Ticket Factory". 20
5. NEC operates in direct competition with other box office businesses (e.g.
Ticketmaster) for allocations of event tickets. Its operations are not restricted to its
own venues, and on occasion, it will seek or be offered the opportunity to sell tickets
for events at other venues. Equally, other box office businesses may seek allocations
of tickets to events held at NEC’s venues. 25
6. In selling tickets through its Ticket Factory brand, NEC acts as a ticket-selling
disclosed agent for events held at its own venues. For tickets that it sells for events at
other venues, it acts either as disclosed agent or as principal. When it acts as agent,
NEC does not take title to the tickets, and the money from ticket sales is collected on
behalf of the principal, the promoter. The claim before the Tribunal in these 30 proceedings relates only to events held at NEC’s own venues.
7. NEC runs its own call centre with a national rate ticket hotline number. NEC
also sells tickets via its website. Alternatively, customers can buy tickets over the
counter, or by post.
8. NEC’s box office-related income is generated in three ways: 35
(1) "Facility Fees" are charged by NEC to the promoter of the event for which
NEC is selling the tickets on the promoter's behalf in consideration for NEC’s
agency services to the promoter.
3
(2) “Booking Fees" are charged to the ticket-buying public by NEC in
relation to ticket sale transactions carried out over the telephone and the
internet. They are set at around 10% of the price of the ticket, or higher for
events where the market will bear a higher amount. The only method of
payment accepted by NEC for sales by telephone or internet is credit card or 5 debit card.
(3) "Transaction Fees" are also charged to the ticket-buying public by NEC,
in addition to the Booking Fee. NEC describes this charge as follows on its
website: "A transaction fee is a one-off charge per order. It covers the
administration costs and overheads associated with each ticket sale." 10
9. The claim before the Tribunal in these proceedings relates only to Booking Fees
in cases of credit card and debit card payments.
10. When a ticket is purchased over the counter then the Booking Fee is only ever
levied when payment is made by credit card or debit card, including where the credit
or debit card is used as part payment. 15
11. When a ticket is purchased by post by cheque or postal order, a Booking Fee
was charged until 2007, but has not been charged since then. When a ticket is
purchased by gift voucher (which can be done over the counter or by post), no
Booking Fee is charged.
12. NEC generates the tickets at its head office and sends them by post or 20 electronically to the customer, having included any additional promotional material. If
there are fewer than three days to the event, NEC will arrange for the non-electronic
tickets to be collected by the customer. Special arrangements may also be made for
the tickets to be collected on the day of the event. There is no reduction in any
Transaction Fee charged to take account of the tickets not being posted. NEC’s staff 25 will be at the event venue in order to assist those with lost tickets, those that have
turned up at the incorrect venue, and to issue the tickets for collection that day (as
described above). These after-sales services are identical for the purchases of tickets
incurring a Booking Fee and those that do not, and are extended to holders of tickets
purchased through other box office suppliers. 30
13. NEC has always treated all of Facility Fees, Booking Fees and Transaction Fees
as consideration for standard-rated supplies for the purposes of its VAT returns.
However, NEC now considers that the Booking Fees levied in respect of credit card
and debit card payments are consideration for a supply of payment processing
services which is exempt from VAT. NEC has submitted claims for repayment of 35 overpaid output tax in respect of the Booking Fees as detailed in the table below.
HMRC disagree and have refused to pay those claims.
40
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