Reply To: VAT charging on revenue splits

Forum Categories GENERAL VAT DISCUSSIONS VAT charging on revenue splits Reply To: VAT charging on revenue splits

Trevor S

Thanks. Obviously this clause needs to be read in conjunction with the rest of the contract, but it appears to me to be more indicative of the second option in my previous post, rather than the first. Particularly if it’s you (rather than the venue) that has entered into arrangements with other ticket sellers, and decides how many are allocated to each to sell. If the venue (and other sellers) are acting as your “disclosed agent” (rather than as a “principal” in their own right) when making sales to the public, the requirement to declare VAT when those sales are made falls on you, not them. If this is the case, the venue won’t have declared any VAT on the sales, so they will calculate percentages based on total selling prices, less the costs mentioned. I assume that these are specifically excluded as they’re fixed costs to the venue which they’ll incur regardless of how many tickets they’re able or allocated to sell.  Essentially they are treating their share a bit like a venue hire (as you suspected in your original question) plus a supply of their other services to you.  But that is what you’ve agreed to in the contract.

If I’m right, then in your accounts you should be declaring VAT on the full ticket sales. The venue will calculate their share, which they’ll send you a “receipted” VAT invoice for, and the balance of the ticket sales income after deduction of that invoice. You can recover the VAT shown on the venue’s invoice via your VAT return.

I would suggest that it’s worth showing a VAT advisor the full contract to check they also interpret it in this way – given that it may well impact on the VAT accounting you’ve already done. Clearly that sort of work would be beyond the scope of a forum and your accountant may be able to recommend an advisor that they’ve worked with before. If I’m correct in my assumptions, the venue has calculated their share in line with the contract – so there’s nothing you can do about that now, but bear it in mind when negotiating the percentage splits in the future – either with that venue or any others operating under a similar arrangement.