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Music artist manager invoicing venue for an artist

Manager invoices the venue for the artist, treatment of VAT both in EU and outside

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Hi,

My client is a music artist manager. The company often books and invoices a venue for one of their artists performance. This ensures a swift and easy deduction of the managements commission before paying the balance to the artist, rather than the artist invoicing the venue and then chasing for payment from the artist.

The management company has become VAT registered as the turnover has reached the registration limit. The management company quite often books artist performances around the world, both small gigs and larger festivals. The query is regarding the correct charging of VAT. I have limited experience in dealing with international sales/purchases and VAT, I can cover the more basic scenarios but I am not completely sure on this. Being a "one-man band" it is often tricky to confirm your understanding or use past experience.

I have had a good read through HMRCs website and a look at a few other articles, but I still feel lacking in conviction. My understanding is the main points regarding charging VAT are-

  1. Is the customer a business customer (ie- a venue hires an artist for a gig) or a non-business customer (entertainment, ie- a couple hire an artist to perform at their wedding)
  2. Where is the gig? For both business and non-business customers, wherever the gig is this is the "place of supply for VAT" (there is reference to this further down regarding "Events" and a link). So even if it is a UK company but the gig is in France, the place of supply for VAT purposes is France.

So the following would apply-

  • UK - If the gig is in the UK then you should charge VAT at 20% (regardless of whether it is a business or non-business customer)
  • Within the EC - Business customer: You do not charge VAT       Non-Business customer: VAT 20%   (as stated in HMRCs VAT guidance under "Events", "The place of supply of admission to an event is where the event takes place, irrespective of where the customer or supplier is located. These include such services as: entertainment and cultural performances - including sports events, the right to attend exhibitions, conferences, meetings or seminars, ancillary services - such as payments for cloakrooms or similar facilities. If the customer is a non-business customer then most supplies relating to events are subject to VAT where they are carried out. This includes all services connected to cultural, artistic, sporting, scientific and educational events, or entertainment."
  • https://www.gov.uk/guidance/vat-how-to-work-out-your-place-of-supply-of-services#which-countrys-vat-rules-to-use-when-charging-vat-on-services
  • Outside the EC - You do not charge VAT

 

Would anyone have any experience or thoughts on whether they agree with my understanding above please? All replies would be most appreciated, thank you.

Replies (4)

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Stepurhan
By stepurhan
10th May 2017 13:03

My immediate thought is that your client is not supplying an event under the guidance quoted. They are supplying the services of the musician to perform at the venue. Presumably the venue is the one charging for admission to that performance. (or controlling who has admission in the case of a private function like a wedding). It is the supply of an individual with specialist skills.

Therefore, in my opinion, the special rules for events do not apply and the standard rules for place of supply should be used instead.

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Replying to stepurhan:
By Ashlea
11th May 2017 10:45

Thank you for your reply.
To clarify, it is wherever the business of the client (event organiser etc) is based that should dictate the place of supply?

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Replying to Ashlea:
Stepurhan
By stepurhan
11th May 2017 10:59

As I said, the general rule.

Business Customer - Where the business belongs
Non-business Customer - Where the supplier belongs

That is just my opinion based on the facts given though.

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By shaun king
10th May 2017 22:59

Without going into great detail as what you ask is complex - i am afraid your understanding is incorrect. Paid advice is needed!! - happy to oblige of course

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