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Should venue add VAT onto commission of our sales?

We sell merchandise at gigs. The venue takes 10%. Should they add VAT to that?

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Hello,

My band is not VAT registered.

We sell merchandise at shows, and by 'we' I mean our crew, not venue staff.

The deal with this particular venue is that they take 10% + VAT. In this case we sold £198 worth of stock and they took £19.80 + £3.96.

As we're not VAT registered, and there's therefore no VAT component in the actual sale price to the audience member, are the venue correct in adding VAT to their cut?

The venue is VAT registered.

Thanks.

Replies (8)

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By Les Howard
02nd Dec 2021 16:46

The venue is correct to add VAT to its commission, as it is making a service to you. They should have explained this clearly to you before the 'event.'
Hopefully you'll soon become registered for VAT and be able to claim the VAT!

Thanks (3)
Replying to leshoward:
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By Piers66
02nd Dec 2021 16:54

leshoward wrote:

The venue is correct to add VAT to its commission, as it is making a service to you. They should have explained this clearly to you before the 'event.'
Hopefully you'll soon become registered for VAT and be able to claim the VAT!


Thanks for the answer.

I'm not doubting it, but can you explain this to me a little more please. What exactly is the service that they're providing?

Thanks (0)
Replying to Piers66:
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By jonharris999
02nd Dec 2021 17:24

Les is correct - (NB Les is always correct about VAT and no doubt about other things too) - they are supplying you with the right to sell your goods on their premises, in other words the use of their premises - a standard-rated supply.

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Replying to Piers66:
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By Leywood
02nd Dec 2021 17:46

If they were not providing a service you wouldnt be paying them at all.

Les is a VAT expert.

Thanks (1)
Replying to Piers66:
RLI
By lionofludesch
02nd Dec 2021 18:36

Piers66 wrote:

Thanks for the answer.

I'm not doubting it, but can you explain this to me a little more please. What exactly is the service that they're providing?

You must know or you wouldn't be paying them.

As said above, it's nothing to do with whether you're registered for VAT.

I'm not registered for VAT either but the garage still charges VAT on the petrol I buy. Because they're registered.

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By Paul Crowley
02nd Dec 2021 17:33

It has nothing to do with you being VAT registered or not
Venue is VAT registered and are charging VAT for giving you the opportunity to sell

+1
Les is always right

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By Piers66
02nd Dec 2021 18:10

Well, that explains it!

Thanks for all the answers.

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Ivor Windybottom
By Ivor Windybottom
03rd Dec 2021 10:27

Another way to understand this is to consider your personal position.

As an individual not registered for VAT when you buy a musical instrument, such as a banjo, the supplier will charge you VAT even though you are not VAT registered and even if you use the banjo for business purposes.

That VAT on your banjo is just another cost of business when unregistered, but your income from banjoing is not subject to VAT, so you keep the concert fees in full.

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