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The standard rate of VAT was reduced from
1 December 2008 from 17.5% to 15%. HMRC
have published some further frequently
asked questions which clarify the correct
treatment in several situations. One
situation which helps to explain the
complexity of the issue is as follows:
‘Treatment of tickets to events
(theatre, football season tickets etc.)
1. I am a concert promoter. I
do not issue VAT invoices but received
payment in October 2008 for a concert that
will take place in April 2009. Can I
adjust the VAT?
The short answer is no. The special
rules for supplies spanning the change in
the VAT rate apply where payment is
received (or a VAT invoice is issued)
before 1 December 2008 where the goods are
to be supplied or services performed on or
after that date.
In the case of tickets to a concert (or
theatrical performance etc) what you are
selling is the right to attend a
particular event. As in this instance the
right to the event was granted in October
2008, the supply does not span the change
in the rate and VAT of 17.5% should be
accounted for.
The same principle applies to football
season tickets. If these were bought and
paid for prior to 1 December 2008 they are
subject to the 17.5% VAT rate with no
scope for adjustment.
Update 21 January 2009
Since the above guidance was published
on 8 December 2008 it has become clear
that a number of businesses were not aware
of HMRC’s view of the correct VAT
treatment of tickets to events. Some have
assumed that where a ticket was sold prior
to 1 December 2008 for an event due to
take place on or after that date that the
15% rate should apply.
Where a business has mistakenly
refunded its customers the difference
between the 17.5% VAT originally charged
on ticket sales and the 15% rate HMRC will
operate a light touch and will not seek to
recover the VAT that has been refunded.
This treatment applies to refunds that
were made up to the date of the
publication of this update.’
Note that HMRC will apply a ‘light
touch’ where businesses have incorrectly
applied the rules up until the issue of
the update on 21 January 2009.
As this particular situation
illustrates, the change in the VAT rate is
causing widespread confusion. If you have
any concerns please do get in touch.
Internet link:
HMRC VAT rate guidance |
