Whether the admission relief is going to be of significant benefit to the sector depends greatly on the ability of venues (particularly theatres and concert venues), to re-open buildings for live audiences on a viable basis in adherence with government guidelines issued for COVID-19. HMRC have included a reference to admissions to live online performances, which have been the main way for venues to open without a live audience. However, the VAT guidance on this is limited.
It’s important to note that selling access to watch a live event online is subject to entirely different VAT rules to selling admission to your venue.
When online access is granted to consumers to participate in events, it is treated as digital service which is liable to VAT in the customer’s country. If the annual value of your total cross-border supplies of digital services to consumers in the EU in the current year and previous year is below £8,818, the place of supply is the UK and UK VAT is due. If it is over that threshold, the place of supply is where the consumer is located. In this circumstance, only tickets sold to UK consumers would be liable to the temporary 5% rate and ticket to EU consumers would be liable to the VAT rate in their country.
This requires UK suppliers of digital content or broadcasts to either register in each EU member state where customers are based, or register and account for EU VAT under the VAT Mini One Stop Shop (‘MOSS’) system in the UK.
What should you do?
If you are not already registered for VAT MOSS you should check your liability to be registered. The UK’s MOSS is due to end on 31 December 2020 due to the end of the transitional regime, so you may need to re-register for the scheme in another EU country as a non-EU supplier after that. If you are affected by the above, get in touch with one of our VAT experts for specialist advice.