[UPDATED] 7th December 2021
As announced in the 2021 budget, the current reduced rate of VAT stands at 12.5%.
The normal standard rate of 20% will now return on 1st April 2022.
Earlier this month the UK government announced a temporary reduction in the VAT rate for industries including ‘attractions’. This includes concerts and festivals, meaning they can also benefit from the new 5% VAT rate. We’ve put together some guidance on how this change affects our partners, and how they can best take advantage of the new rate.
What is the new VAT rate and how long does it last for?
The temporary reduction in VAT rate from 20% to 5% became effective from 15th July 2020, and was set to last until 12th January 2021.
This rate was then extended to the end of September 2021. From October 2021 it has since risen to 12.5% and will return to the standard rate of 20% on 1st April 2022.
What does the new rate apply to?
The VAT reduction applies to ticket sales made during this period, including advance ticket sales for events beyond the 12th January. You can read more on the rate reduction on the UK government website here.
How does the new rate affect me?
If you are VAT registered, you will now be able to reduce your VAT bill to the new 5% rate. It is important to understand that it is entirely up to you whether you decide to pass on this saving to customers by reducing your ticket prices. If, as we advise, you keep the ticket prices the same as before, you will receive more net revenue.
With that in mind, we strongly urge promoters to consider putting their events on sale early to benefit from this support. We have already seen strong demand from consumers for next year’s season.
How does this affect Festicket & Ticket Arena?
We will also benefit from the rate reduction, and have made the conscious decision to keep our fees the same. Customers will therefore pay the same prices as before.
How will Festicket & Ticket Arena help me with the filing side of this?
Our reporting suite allows promoters to select ‘sales by date range’, meaning they can easily split sales between pre and post 15th July, as well as 12th January. This should make filing sales at the correct VAT point simple.
If you have any questions at all regarding VAT on ticket sales, please get in touch with your relevant Account Manager on email@example.com.
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