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Peasie


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A hypothetical two part VAT question
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I was at a football match at the weekend and was asked a question on VAT. I gave my answer and I suspect a couple of further question may be fired my way at future games so I'll just ask them here. I have my own opinion and I dare say it won't please the football club and am just seeking others opinion.

So to begin.....

Some games at this level are cup games (not league) and therefore the gate money is shared after deducting officials fees and a percentage goes to the association organising the cup.

The home club are not going to get the full amount but when it comes to seeing if the club is over the VAT threshold I'm of the opinion it is the figure before the deductions that is used (even if that won't seem logical to the club). Is this the case?

Part two follows on from this.

Say the gate money was £5,000

deduct £200 for referee and assistants

Sub total £4,800

Less 10% to the association £480

To be divided £4,320 (£2,160 each)

The home club then has to hand over £5,000 / 6 = £833.33 to HMRC for VAT. The away club may not have the same level of income so are not registered for VAT.

I can see the club arguing they only receive £2,160 they should calculate the VAT on that figure to give £360 for HMRC.

 

What do others think? 



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Jay


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I dont normally get too involved with VAT but I would think you need to look at the order of events.

The club received £5000, this figure is used as part of the VAT threshold TURNOVER calculation as they actually received £5000

 

How the club decide to spent their gate money is for them to decide, but the VAT is due on the money recieved.

 

Vat can be reclaimed on certain goods /services, but not all.

They simply have to follow the rules.

 

Its better to view this as separate transactions, and then it falls into place

 

 

As I said, I have not dealt with VAT for some time so answered using common sence so could be incorrect .  confuse

 

 

 

 

 

Jay

 

 

 

 

 

 



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