Where performed services: Supplies of admission to relevant business customers: Meaning of “admission”
In most cases it will be clear from the nature of the services whether there is a charge for admission and an underlying event. For example, where a business buys tickets to a sporting match in order to entertain clients then it is clearly buying the admission to an event. It will not matter whether this is in the form of seats within a stand or a hospitality box. The main purpose of either is to enter the stadium to observe the event. Similarly, where a business customer pays to enter an art exhibition this would again be a payment for admission to an event.
There are, however, circumstances where a payment is for hosting an event rather than for admission. For example, a business (“the client”) may pay a third party (“the provider”) to host and organise a conference for the client’s staff. The provider arranges a venue, speakers and refreshments. Even though there may be limits on the numbers able to attend, the provider is still supplying the event rather than admission to it. As such the supply falls under the general rule (see VATPOSS06000). However, if the client decided to sell spare places to other businesses they would represent admission to the event with the place of supply where the event is held.
Where admission to an event is provided as part of a larger service the normal rules determining single and multiple supplies apply. For example, if a motor racing company sells a package of services including advertising on a car, use of a brand logo and hospitality together with admission to races then, where the admission is incidental or ancillary to the other services, the whole package will fall within the general rule.
- A professional institute hosts a tax conference. Admission is restricted to its members who must pay a fee to attend. As educational conferences represent an event, the supply by the institute to its member is admission and so is supplied where the event takes place.
- A company purchases a ticket for use of a hospitality box at cricket venue throughout the season. It is anticipated that there will be between fifteen and twenty matches. Even though the season ticket covers a number of individual matches it is still regarded as admission and so supplied where the matches take place.
- A UK based training company puts on a tax conference in Germany. The company books the venue, buys in catering and provides the speakers. It then engages a German promoter to whom it supplies the conference. The promoter in turn sells tickets to the participants acting as a principal. The promoter pays the UK training company on a sliding scale depending upon the number of people attending the event. Each transaction must be considered on its own merits, so the supply by the training company to the German based promoter is the hosting of an event, rather than the right of admission to participants. It falls under the general rule. It is the German promoter who is selling admission to the conference and so its services are supplied in Germany where the event takes place. As the recipient of the supply by the training company, the promoter must also account for a reverse charge in Germany on the value of the consideration it has paid to the UK company to the extent that the supply is taxable.
- Company A is based in the UK. It puts on a technical seminar in Spain together with other group companies based in France. A Spanish organiser agrees to provide a venue, refreshments and facilitators. A share of the cost of the event is recharged by Company A to the French businesses. As there is extra capacity Company A decides to sell a number of places to a third party, Company B, also established in the UK. The supply by the organiser to Company A is for the hosting of an event rather than a supply of admission. The service therefore falls within the general rule and Company A must account for a reverse charge in the UK. The recharge to the other group companies in France also relates to the general hosting of the event rather than specifically for admission. Therefore, to the extent that they are supplies for VAT purposes, they are taxable under the general rule with the French group companies required to account for a reverse charge. On the other hand the supply to Company B is the granting of the right for a number of people to attend the seminar. As such it is a supply of admission and is supplied where the event takes place. This may mean that Company A is required to register for VAT and account for the supply in Spain.
- An intermediary buys tickets for an opera in Italy on behalf of a UK business customer. As the ticket issued by the theatre gives the right to be admitted to an event, the place of supply will be Italy and the ticket subject to Italian VAT. Depending on the contractual terms the intermediary may be acting either as
* a principal, in which case they will be supplying the right of admission to an event in Italy and so may be required to register there and account for Italian VAT, or * an agent, in which case their agency fee payable by the UK customer will fall under the general rule (taxable where the business customer belongs). (The ticket itself is treated as supplied directly to the UK customer by the theatre and remains subject to Italian VAT.)
- A UK motor manufacturer engages a German company to put on a demonstration of a new range of cars. Selected members of the public are invited to the event to drive the vehicles. There is no charge to those attending so the event cannot be a supply of admission for VAT purposes. The motor manufacturer is not paying for admission but for the promotion of their product and so the supply to them falls under the general rule. They should therefore account for a reverse charge in the UK.