Covid hit the entertainment and hospitality sectors harder than most. To help alleviate the financial pressure, the UK government introduced a number of measures, including slashing the VAT rate for hospitality businesses from 20% to 5%.
Recently, the UK announced that VAT rates on tickets for concerts and live events would return to the pre-Covid level of 20%. However, not everyone is pleased. The head of the music industry group UK Music has written to chancellor Rishi Sunak asking him to rethink the increase.
UK Music chief executive Jamie Njoku-Goodwin wrote that “pushing up VAT to 20% would be hugely damaging for the music industry and leave music fans facing a cost of gigging crisis.”
According to Njoku-Goodwin, the increase comes as the industry is busy rebuilding following the economic devastation of the pandemic.
What about VAT on virtual events?
While many businesses are looking forward to hosting large in-person concerts and events, the Covid era may have produced lasting changes to how some people experience events.
Virtual events became a popular alternative during periods of social distancing. However, in many cases, organisers may choose to continue to hold online concerts, conferences and events. After all, virtual events are often convenient and can be accessed by a global audience.
However, hosting a virtual event involves its own set of complex VAT questions. How do you apply VAT to tickets? What happens if you sell merchandise through the virtual event’s website? Are the VAT implications affected if your audience is located in different countries?
A custom VAT compliance solution for the events industry
Given the complexities of these questions, there are no one-size-fits all answers. If you’re running events, in ‘real life’ or virtually, get in touch with VAT IT, the world’s VAT compliance and recovery specialists, for a personalised assessment of your VAT obligations.