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Where Taxpayers and Advisers Meet

V.A.T. Query

chris1999
Posts:2
Joined:Fri Mar 13, 2015 3:52 pm
V.A.T. Query

Postby chris1999 » Fri Mar 13, 2015 4:50 pm

Good afternoon,

I am looking for some help with regards to a V.A.T. problem regarding secondary ticket sales:

This is the basic scenario:

I purchase tickets from a Primary Ticket Website - I have included a breakdown on an order to show the V.A.T breakdown (for which I asked for the V.A.T receipt as a one-off - they are not usually issued and I am unable to obtain them for 99% of purchases) - the breakdown is just to highlight how V.A.T is applied to the order, please see further below for the usual scenario in how it operates:

V.A.T Breakdown

4 tickets at £79.75 (including booking fee).

The total cost - £325.50, including postage and packing at
£6.50.
Including VAT @ 20.00% - £53.17


Usual Scenario

Usually I purchase a ticket for £42 on a Primary Ticket Website - (£35 ticket, £5 booking fee, £2 postage for example)

I then receive an email confirmation - however this confirmation does not give a breakdown of V.A.T on it, and I am unable to obtain V.A.T receipts from the Primary Ticket website,

I then sell the tickets at a profit on a Secondary Ticket Website, this is what the buyer on the Secondary Ticket Website sees when purchasing:

No. of Tickets: 1
Price Per Ticket: £81.11
Processing Fee: £15.79 (inc VAT)
Delivery Fee: £2.40 (inc. VAT)

Order Total: £99.30
Total V.A.T: £4.26

From the above order V.A.T is only charged on the Processing Fee, and the Delivery Fee but not the ticket itself,

The money I receive is the Price Per Ticket (£81.11 in above example), I do not receive any information with regards to V.A.T. breakdown from the Secondary Ticket Website, just a summary showing me what they have paid me (a list of the 'Price Per Ticket' fees that I have received),

Further to this on reading the T&C's on the Primary Ticket Website I never actually own the ticket, this lies with the promoter, who supply the tickets to the Primary Website, so the Primary, Secondary or myself ever owns the ticket.

My sales (turnover) are into the V.A.T threshold and therefore need to start paying V.A.T on something - but I don't know what! My concern is because I cannot obtain V.A.T. invoices from the Primary Ticket Website (they do have a V.A.T number) I am going to be faced with having to pay 20% V.A.T on all of my turnover (rather then just the profit), which would work out at about 5 times as much as if I was only paying V.A.T on my profit. I should also mention I am above the threshold for Flat Rate V.A.T so this is not possible.

One final thing - I do not issue any kind of invoice to the buyer - I simply print a shipping label via the Secondary Ticket Website and send them off via a courier.

A number of questions:

1. What exactly (based on the above scenario) do I need to be paying V.A.T on?
2. Does the fact that I never legally own the ticket make a difference? (Acting as an agent in some way?)
3. Any further advice?!

Any help/advice would be greatly appreciated

Thanks

superbtaxis
Posts:30
Joined:Sat Feb 07, 2015 3:29 pm

Re: V.A.T. Query

Postby superbtaxis » Wed Apr 01, 2015 7:58 pm

If you ask for a VAT invoice and the seller is vat regd arent they legally obliged to supply one?

richardmb
Posts:6
Joined:Wed Mar 04, 2015 11:23 am

Re: V.A.T. Query

Postby richardmb » Thu Apr 02, 2015 10:27 am

Chris

The terms of your agreement/contract with the primary ticket supplier will be key as this will determine whether you act as a disclosed or undisclosed agent. This will then drive the appropriate VAT treatment.

chris1999
Posts:2
Joined:Fri Mar 13, 2015 3:52 pm

Re: V.A.T. Query

Postby chris1999 » Fri Jan 06, 2017 11:06 am

Thanks for your replies - and apologies it has taken me so long to reply!

Can you just explain the disclosed/undisclosed scenarios in more detail?

Thanks

uksoletrader
Posts:1
Joined:Wed Jan 11, 2017 2:07 pm

Re: V.A.T. Query

Postby uksoletrader » Wed Jan 11, 2017 2:16 pm

Chris,

Currently going through a similar dilemma (see my topic in this forum - may or may not have been approved yet, but it should be soon).

Could I just ask what you've been doing regarding VAT in the meantime? I notice that it has been over 18 months between your initial post and most recent reply.

Sherpy
Posts:1
Joined:Sat Feb 11, 2017 1:19 pm

Re: V.A.T. Query

Postby Sherpy » Sat Feb 11, 2017 1:26 pm

Hi UKSOLETRADER,

I am in the exact same position. Only been trading for three months, but recognise that VAT threshold will be crossed in another 6 months.
I have sought advice from an experienced local Chartered Accountant, but the accountant, as yet, seems to be finding it difficult to come
up with a way forward.

I have been unable to locate your post that you refer to. Would you be kind enough to point me in the direction of your post?

Many thanks.


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