Rally4wales have been working extensively to finalise key details of the roads self-repair scheme due to be implemented from January 2017 for all motorsport in Wales that use the Welsh Govt. Forest Estate. By repairing the roads after rallies on behalf of the event organisers, the self-repair scheme crucially caps costs to organisers for at least three years, at the previous rates. Inflation increases will be pegged at the published Govt. RPIJ rates.
Discussions have been held with National Resources Wales, the member clubs of the WAMC, Wales’ regional association for rallying as well as the UK’S governing body, the MSA. These have concentrated on finalising a contract between Rally4wales and the event organisers. The MSA as governing body wish to have oversight on behalf of their recognised organising clubs that run events in Wales.
The treatment of Value Added Tax (VAT) charged on the road repair transactions is important. Previously, Natural Resources Wales as landowner of the Welsh Government Forest Estate was entitled to exempt VAT on charges for using their roads.
Under this new arrangement, Rally4wales as a service provider, and not a landowner, must charge VAT on the road repair mileage charges. These main fixed charges, Primary usage £698.00, Secondary usage £414.00 and Recce Usage £20.30 plus VAT, will apply to all branches of motorsport where similar vehicles use the main forest roads and do similar damage.
Recently, Rally4wales have obtained expert specialist advice to assist the event organising clubs to minimise the overall impact of the VAT charged. The VAT treatment element is complicated, with non-profit clubs, if deciding to register for VAT, should exempt VAT on rally entry fees and certain qualifying costs may be reclaimed.
Organisers may be able to reduce the impact of VAT charged, through their own club governance and business activity. The MSA has accepted the Rally4wales position on VAT following discussions, and it is noted that even in the ‘worst case scenario’ – this still represents a significant reduction on proposed cost increases that the sport was facing from 2017 onwards in Wales.
Although the process has been complex with a great deal of work needed in a very short time window and many challenges have been overcome, both MSA and Rally4wales are pleased that matters are being brought to a close, ensuring that no 2017 events will be in jeopardy.
There are still much practical, logistics and compliance work to be done before the first event hands over to the repair teams in mid-february. Rally4wales is continuing its own close working relationship with Natural Resources Wales operational teams to complete these within January 2017.
Rally4wales will act to repair road damage