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Temporary reduced VAT rate on ice skating

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We are a community centre with a temporary ice rink open to the public in December 2021.  Would the tickets be eligible for the temporary reduced VAT rate of 12.5%?

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By David Ex
05th Oct 2021 10:18

Not sure. You may be skating on thin ice.

This is the extent of the guidance:

https://www.gov.uk/government/publications/revenue-and-customs-brief-2-2...

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By Susan Marco
05th Oct 2021 10:26

Thanks. Looking at the guidance, I think it would fall under "similar cultural events and facilities" and be eligible.

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By VATs-enough
05th Oct 2021 11:01

Are you supplying 'admission ' to the premises - possible 12.5% VAT
Or
Are you supplying the 'right to participate' in sport, providing equipment, etc - 20% VAT

Subtle but important distinction

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Replying to VATs-enough:
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By Susan Marco
05th Oct 2021 11:15

Interesting... I think as the customers are mainly families having fun rather than being involved in serious sport it would be admission to premises and 12.5%.

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By Jason Croke
05th Oct 2021 12:01

I think VATs-enough posting is crucial and whether something is "serious" or "fun" doesn't change the fact that a customer is paying to participate in the act of ice skating (or in my case, holding onto a railing for 30 minutes and trying to look like I'm just resting).

Most sporting activities where you participate is not an entrance fee, it is a fee to participate, so if you had a fee for just viewing/watching then that would be reduced rated, but if paying for skates and an hour on the ice, its participation.

HMRC guidance was terrible, ATT posed a scenario here involving indoor skydiving https://www.att.org.uk/vat-temporary-reduced-rate-hospitality-holiday-ac... but the essence is participation.

HMRC updated their guidance, a little bit, https://www.gov.uk/guidance/vat-on-admission-charges-to-attractions and it states the reduced rate doesn't apply to sporting events, it then takes you to another link where it lists what are deemed to be sporting events, and ice skating is on the list. So its seen by HMRC as a participative activity (ie, a sport).

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By Jason Croke
05th Oct 2021 12:03

On a different point, the way in which you structure your tickets, it may be possible to have the hiring of childrens skates as zero rated and as a separate supply to the standard rated ice skating.

Neil Warren did an article on the case here https://www.accountingweb.co.uk/tax/business-tax/vat-skating-on-thin-ice

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By Susan Marco
06th Oct 2021 10:29

Thank you very much everyone - very useful information.

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