For businesses hosting events, whether exhibitions, congresses or even virtual sessions, there are complex VAT rules that must be considered. This article outlines the key VAT rules from a UK perspective and gives an overview of the challenges a business may run into when doing so.
Event Admission
For any UK business selling admission tickets for an event held in the UK, these sales are typically subject to UK VAT at 20%, subject to many exceptions, such as when the admission seller has charitable status or is established outside of the UK.
Sponsoring and Advertising
Sponsorship or advertising sold on a B2B basis is subject to the general place of supply rule for services. When both the supplier and customer are UK established, UK VAT applies at the standard rate of 20% typically applies, again, subject to exceptions.
Where a sponsorship package is sold, the VAT treatment of the whole package is typically subject to the VAT treatment for advertising where this is the principal element of the supply. However, if the value of the ancillary elements which make up the package, e.g., admission tickets or an exhibition space is disproportionate to the value of the advertising, each element may need to be assessed separately for VAT purposes.
Therefore, when selling sponsorship packages, it’s worth considering if it’s a single supply of sponsorship (i.e., all treated as advertising) or a mixed supply, where each component of the sponsorship package is subject to its own VAT treatment. The perception of the customer is important in this instance, and a review of the sponsorship contract can be a useful indicator.
Event spaces for exhibiting
The UK treatment of event spaces depends on whether related services are included. Where the stand space is supplied without any related services, it is considered a land related service within the scope of UK VAT where the event takes place in the UK.
Conversely, if the stand space is accompanied by ancillary services, such as electricity, wi-fi or cleaning services, the VAT treatment changes to a general place of supply rules, subject to UK VAT when supplied to a UK business.
Invoices
Invoices for services within the scope of UK VAT must comply with UK VAT invoicing rules when invoiced by a UK business. Separate rules apply where the seller of the services is established outside of the UK.
Fortunately, the UK does not require VAT invoices to be issued for B2C supplies except where the customer specifically requests one. By contrast many countries mandate VAT invoices for both B2C and B2B transactions which often presents a challenge for businesses whose internal systems are not set up to handle different sets of invoicing requirements and have different VAT numbers included on them.
Recoverability of VAT on expenses
Some event-related costs follow the general place of supply rule, meaning a UK-established host will receive certain services billed to its UK VAT number and report the VAT on its UK VAT return. However, VAT on other services are subject to local VAT in the country where the service is supplied , such as venue hire, accommodation and catering which will be subject to UK VAT where the services are provided in the UK.
How HW Fisher can help
Navigating VAT compliance for UK events requires careful attention and a clear understanding of the rules governing each aspect of event hosting. From ticket sales, generally subject to UK VAT, to the nuanced treatment of sponsorship packages and exhibition space, it is essential to assess how each revenue stream and related expense is treated for VAT purposes.
VAT treatment can vary depending on whether you are selling on a B2B or B2C basis, so it is advisable to consult a VAT expert before launching any revenue generating activities. Early planning can help avoid compliance issues and ensure your business maximises VAT recovery where possible.
Our next article in the series will explore the VAT rules for hosting events overseas, and what UK-based businesses need to consider when planning international events.
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