Share this content
12

VAT on conference sponsorship

Didn't find your answer?

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 (12)

Please login or register to join the discussion.

avatar
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.

Thanks (1)
Replying to paul.benny:
avatar
By blanka
10th Sep 2019 17:48

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

Thanks (0)
Replying to blanka:
avatar
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?

Thanks (0)
Replying to blanka:
avatar
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.

Thanks (1)
Replying to blanka:
avatar
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?

Thanks (0)
chips_at_mattersey
By Les Howard
10th Sep 2019 16:15

What do the recipients get for their 'sponsorship'?

Thanks (0)
Replying to leshoward:
avatar
By blanka
10th Sep 2019 16:56

Discounted price to compare with buying three events separately.

Thanks (0)
Replying to blanka:
avatar
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

Thanks (0)
Replying to leshoward:
avatar
By blanka
10th Sep 2019 18:29

Exhibition stand, advertisement, free delegates..

Thanks (0)
Replying to blanka:
avatar
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#...

Thanks (0)
Replying to WhichTyler:
avatar
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.

Thanks (0)
Replying to blanka:
avatar
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.

Thanks (1)
Share this content

Related posts