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VAT on conference sponsorship

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I am not sure that the company I am working for applies correct VAT treatment when selling annual sponsorships (as a package) on three separate events taking place in London and USA.

This is what has been done:

Invoices to UK established companies have VAT charge on all three events (taking place in UK and USA). Invoices to US based companies for the same events do not charge VAT.

Is this the right thing to do? Based on the place of supply should VAT  be charged on London event and zero-rated for events in USA on invoices to ALL customers independent where they are based?

Replies (18)

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By paul.benny
10th Sep 2019 15:43

On the face of it, your concern is justified.

Is it possible the contracts are structured so that the customer's 'home' events are chargeable while the 'away' ones are bundled for free? This might justify the VAT treatment.

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Replying to paul.benny:
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By blanka
10th Sep 2019 17:48

Yes, we wouldn't have the problem then.. But what if it is not the case?

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Replying to blanka:
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By blanka
10th Sep 2019 17:57

And if this was the case, should the invoice show the details for items charged and free of charge?

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Replying to blanka:
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By paul.benny
11th Sep 2019 11:12

I think the answer is to go and get some proper advice. You've gained enough from here to be able to say to your management that there are VAT problems and to justify a more thorough health check by a specialist.

Ask your company accountants whether they have international expertise or get them to recommend someone and ask for a quote. There are lots of generous people here who freely share their expertise but your challenges are too complex and too numerous for us to be able to provide reliable guidance.

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Replying to blanka:
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By blanka
10th Sep 2019 17:57

And if this was the case, should the invoice show the details for items charged and free of charge?

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chips_at_mattersey
By Les Howard
10th Sep 2019 16:15

What do the recipients get for their 'sponsorship'?

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Replying to leshoward:
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By blanka
10th Sep 2019 16:56

Discounted price to compare with buying three events separately.

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Replying to blanka:
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By JoF
10th Sep 2019 17:23

This is not what Les was asking.

What do they get for their wonga?

I would suggest that your company engages Les as a VAT expert, given your varied worldwide VAT queries and your apparant lack of experience in this field. I can certainly recommend him very highly. Assuming that is he wishes to take you on.

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Replying to JoF:
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By blanka
10th Sep 2019 19:15

It wouldn't be wise to "engage" Les (or you), he doesn't know the answer!

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By stepurhan
11th Sep 2019 08:46

blanka wrote:

It wouldn't be wise to "engage" Les (or you), he doesn't know the answer!

The only reason Les doesn't know the answer is because you haven't supplied sufficient information. The more complex a situation is, the more the precise detail matters. Vague one line answers do not cut it.

But if you would rather take cheap shots at people than solve your problem then do carry on.

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Replying to blanka:
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By JoF
11th Sep 2019 09:45

Of course Les knows the answers, but he cannot magic full answers on only half the story.

I wouldnt be engaging you with your attitude.

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Replying to JoF:
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By paul.benny
11th Sep 2019 09:06

To be fair to the OP, it looks like s/he has inherited a particular practice and has enough VAT knowledge to question it - if not enough to know the right answer. We all have to start somewhere and I respect a willingness to ask questions and listen to the answers given.

It may well be the case that the OP's company needs to get some wider advice if they have been making a mess of their VAT to date - but that's a slightly different point.

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Replying to paul.benny:
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By JoF
11th Sep 2019 09:54

Agree we all start somewhere, but surely some of that has to be a doing an element of research before asking on here.

Listening is key as you say, which does seem to be an issue here. ...https://www.accountingweb.co.uk/any-answers/when-to-reverse-charge-vat and https://www.accountingweb.co.uk/any-answers/when-to-reverse-charge-vat

At least this time, after a bit of nudging there is a modicum of attempting to answer the questions posed, but the information to make an informed decision is still rather sketchy at best. So taking the wider advice I suggested would be benefit both the company and indeed, with the way Les goes about things, the OP's wider learning of the subject.

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Replying to blanka:
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By WhichTyler
10th Sep 2019 18:08

that doesn't sound like sponsorship to me; sponsorship usually means marketing/branding benefits and maybe some side benefits suchas a tickets to the event. Usual practice is to value each benefit within the contract and apply the usual place of supply rules for each element

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Replying to leshoward:
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By blanka
10th Sep 2019 18:29

Exhibition stand, advertisement, free delegates..

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Replying to blanka:
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By WhichTyler
11th Sep 2019 09:05

so not really sponsorship then, it looks like the main supply is is the stand?

have a look at https://www.gov.uk/hmrc-internal-manuals/vat-place-of-supply-services/va... and https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#...

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Replying to WhichTyler:
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By blanka
11th Sep 2019 11:00

I have describe the activity as sponsorship which indeed involves everything that you've mentioned "marketing/branding benefits and maybe some side benefits such as a tickets to the event" and I also added "Exhibition stand, advertisement, free delegates". I have read notice 741a and have mentioned that VAT charge should be place of supply based and not a customer residence. That is why I suspect that the current practice might be wrong hence the reason for my question.

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Replying to blanka:
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By The Dullard
11th Sep 2019 11:08

You have a spectacular aptitude for completely missing the point. The place of supply of a service to a business customer is, by default, where the customer belongs. However, what WhichTyler is suggesting is that you may have a land-related service, which is one of the various situations that override that default.

Calling it sponsorship and maintaining that sponsorship encompasses a whole bunch of other things doesn't change the fact that what people appear to be getting for their money is a stand at the exhibition and the right to have people there without further payment, plus some advertising, which is probably incidental to the main supply of exhibition space.

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