§ Mr. Baldryasked the Chancellor of the Exchequer if he will make a statement about value added tax treatment of the Live Aid concert at Wembley on 13 July.
§ Mr. HayhoeWhile the Government has not been able to accept suggestions that VAT collected on the ticket sales for charitable fund-raising events of this kind should be refunded, I can confirm that it has been possible to allow an exceptional waiver of VAT on four-fifths of the ticket proceeds, amounting to about £190,000. The promoters had intended to sell the tickets for £5, plus a voluntary donation of £20. To escape VAT, such a donation must be genuinely voluntary, and advertised as such. In this case the promoters made a mistake, and the £20 was not advertised as voluntary. VAT should therefore have been due on the full £25 admission charge. However, as a genuine mistake had been made, Customs and Excise, with the authority of the Chancellor of the Exchequer, decided not to insist on the VAT on the donational element of the admission charge. This extra-statutory concession sets no precedent for the future treatment of events of this kind, which will have to comply with the normal rules for donations, that these must be in addition to a realistic admission charge, and be completely at the discretion of the purchaser of the ticket. These are clearly set out in the Customs and Excise VAT leaflet on charities, number 701/1/84.