Urgent VAT enquiry

promos4u

Hi,

Apologies if I am adding this in the wrong area of the forum, but here goes:

I am a small time concert promoter with turnover of less than that which requires me to register for VAT, £63k or so.

So I pay VAT on all of my outgoings such as theatre hire, newspaper adverts etc.

However, as I am non- VAT registered, and if I sell a concert ticket for £20 for example, there is no VAT content in that £20 as I am not VAT registered and therefore unable to charge VAT. Correct or incorrect?

The reason I ask is because of a venue, who sells tickets on my behalf, subtracting VAT from gross ticket sales, when I am not VAT registered. They cliam they are correct, and I am not so sure.

Many thanks in advance.

bni

You are correct in saying that as you are not currently VAT registered whatever you sell you would not include a VAT element.

However if the venue is registered for VAT as I'm sure they are, they will have to pay VAT on their sales to HMRC and they are correct.

You can voluntarily register for VAT if you are below the threshold and in some circumstances that might be more financially beneficial for you. You would have to add VAT on all your sales, but you would also be able to reclaim it on all your outputs. If you are most of your income is from other VAT registered business this would make sense, but if you are mostly selling directly to consumers it might not be worth your while.

cash99

Is the venue selling the tickets as your agent or are they buying from you and re-selling. If it is the former then I think the venue needs to account for vat on the commission only, if the latter then they need to account for vat on the whole ticket price.

In practice the venue is probably playing safe and accounting for vat on the full price.

This is a complicated area of vat law relating to agency and you need professional advice.