MARKET stall holders who are not VAT registered will not have to pay for this type of tax on their rents.

The town hall's cabinet approved plans which will help stall holders affected by the charges and cover the cost without losing money.

VAT registered stall holders can claim the expense back but those who have not faced a 20 per cent rent increase as Wigan Council was advised to introduce the charge by Her Majesty’s Revenue and Customs (HMRC) last year.

By law, Wigan Council has to impose VAT costs to all market stall holders across the borough otherwise it could face fines in excess of £680,000.

If the council fully implemented the extra costs it would have made trading unviable for some businesses.

The local authority contacted stallholders affected to reduce any negative impact on them and sought advice from the National Association of British Markets Authority and other local authorities.

During this process the council froze any payments until a decision by cabinet was made.

These arrangement came into effect immediately and with no outlay made by businesses.

Wigan Council leader, Cllr David Molyneux, said: “We’re committed to helping our markets thrive and supporting local businesses which is why we have decided to take action to make sure those affected do not lose out.

"Wigan Council will help to foot the bill for our markets, which will cost us £170,000 a year but this is the best option to back local businesses.

“As we had not collected any VAT while we made a decision we’re delighted to say that our market traders have not lost out on any of their hard earned income and we look forward to working together with them as we look to the future.”