 Season tickets and change in VAT rate
As has been very well publicised in the press, the UK VAT rate is down to 15% for 13 months from 1 December 2008 to 31 December 2009. It will then revert to 17.5%. The new VAT fraction is 3/23. Download our Coping with the VAT rate change guide for more detailed information for coping with the change.
Where a ticket was sold prior to 1 December 2008, but which relates to services which will be provided wholly or partly after the VAT rate change, suppliers can normally elect to apply the new VAT rate insofar as the services are provided after the rate change. In many cases, opting for the reduced VAT rate will mean that the extra VAT needs to be handed back to the client – many suppliers may see this as an opportunity to gain goodwill. This opportunity applies to services including theatre tickets, season tickets for car parks and entry to football games or other sporting fixtures. It does not apply to rail tickets as they are free of VAT in any event.
However, at least in respect of entry to cultural and sporting events, HMRC has published guidance indicating that it does not agree that the supplier can opt for the 15% VAT rate to apply to events taking place after the VAT rate change. We do not see much technical basis for HMRC’s views and would recommend that potential claimants should not be deterred.
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