beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

VAT Government and Public Bodies

Other local authority activities: miscellaneous (F to M): markets

Charter markets

Some local authorities operate markets established under Royal Charter often dating back to the Middle Ages. These charters often forbid any other person holding a similar market within the confines of a particular town or within a certain distance, often six and two thirds miles.

It is sometimes claimed that they are acting under a special legal regime. However, close examination of these Charters and private Acts of Parliament applying to the predecessor bodies of the local authorities, often reveals that the Charter is of no more than of historic interest.

In particular many local authorities from the mid-nineteenth century onwards took the opportunity to incorporate their market operations in statute. These statutes, invariably private Acts made at the specific request of the local authority concerned, often include reference to the Markets and Fairs Clauses Act 1847 and adopt many of the powers set out by that Act.

Significantly the role of the Act is to consolidate the legislation which applies to markets and fairs created under Local Acts Its main purpose being to create uniformity and simplify procedures. For example, the 1847 Act grants the operators of markets the right to set byelaws, places certain legal requirements upon them about the provision of weights and measures and requires them to clearly display their fees. As the Act applies equally to both the private sector and local authorities, it does not constitute a special legal regime. The provision of a market by a local authority is therefore a business activity.

Rent from stalls and pitches

The letting out of market pitches, shop units and the like is normally exempt from VAT, subject to any election to waive exemption.

Licensing other markets

Local authorities are responsible for issuing licenses to regulate other market operators within their local jurisdiction. The licences ensure that markets are operated within agreed guidelines. They can cover things such as the type and number of pitches, operating hours, market days. Only local authorities can issue market licenses so this is a non business activity and falls outside of the scope of VAT.