They have expanded the business due to a surge in admissions and the farm now includes: Customers can buy tokens for each new farm attraction; this cost will be additional to the park admission. We believe the sale of the tokens are also reduce rated; is that correct?
From 15th July 2020 a new temporary reduced rate (5%) was introduced for admissions to certain attractions. The following attractions are eligible for the reduced rate:
- theatres
- circuses
- fairs
- amusement parks
- concerts
- museums
- zoos
- cinemas
- exhibitions
- similar cultural events and facilities
The temporary reduced rates are subject to change in the coming months.
- For supplies until 30th September 2021, the reduced rate is 5%
- From 1st October 2021 to 31st March 2022 a new reduced rate of 12.5% will apply
- From 1st April 2022 onwards the temporary reduced will cease and the liability will revert to 20%
Your client is applying the correct VAT liability for admission to the farm. It is our view that token sales are deemed to be separate and distinct supplies and carry their own VAT liability for each activity. The payments are made separately, and it is the customer’s choice whether they would like to make further purchases once they’ve gained entry to the farm.
It is unlikely HMRC would see this is a single reduced rated supply. Single and multiple supplies can be a contentious area of VAT and it is recommended your client is familiar with the guidance, found here: https://www.gov.uk/hmrc-internal-manuals/vat-supply-and-consideration/vatsc11110
The sale of tokens for crazy golf and boating activities should be charged at the standard rate of VAT at 20%. On the other hand, a ticket for the outdoor cinema can be treated at the reduced rate as admissions to cinemas are included. It is recommended that the client can identify what the tokens are used for.
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