VQOTW: Supply of Admission Tickets

My client is an online retailer of cinema and theatre e-tickets. Since the announcements across the UK for relaxing COVID related restrictions there has been a surge in sales. The e-ticket is for admission only and can be used in certain cinemas and theatre chains nationwide, irrespective of the regional price differences for admissions. The ticket is valid for two years and can only be used in the UK.
I believe an e-ticket allowing admission to watch a film or show will be classified as a multi-purpose voucher, therefore no supply VAT to be accounted for on my client’s sales. Am I correct?

We need to consider whether your client is making a supply of a voucher, which will then be used to buy an admission ticket for a particular screening or show, or is selling an actual admission ticket.

VAT Notice 700/7 section 9.2 lists examples of things which are not vouchers and this list includes travel or admission tickets.  As tickets tend to be specific to a date, time and possibly also the seat, it seems likely that your client is selling a voucher.

A single-purpose voucher is one where, at the time of issue, the liability of the goods and services, and the place of where they will be supplied is known. We know the place of supply will be the UK in this scenario. We do not know the liability of the sale of the ticket, as it could be redeemed at a time where the reduced rate for the hospitality industry is in place. So, if this is a voucher, it would be multi-purpose rather than single purpose.

The issue/transfer of this type of voucher is not a supply for VAT purposes so would be outside the scope of VAT.  The redeeming cinema or theatre would account for the VAT when it is redeemed for a ticket.  With the reduced rates for the hospitality sector still in force, their sales would carry the following VAT liabilities:

  • Supplies from now until 30th September 2021, reduced rated at 5%.
  • 1st October 2021 to 31st March 2022 a new reduced rate of 12.5% will apply.
  • 1st April 2022 onwards the temporary reduced will cease and will revert to a liability of 20%.

If, however, your client is selling an actual admission ticket then these liabilities will apply to your client’s sales on the date the ticket is sold.

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VAT Advisor
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Priyesh has worked as a VAT Compliance Officer for HMRC since 2013 prior to joining Croner Taxwise. He initially worked in Small and Medium Enterprises before moving on to Wealthy & Midsize Businesses in 2014 where he gained a broad understanding of VAT and trained new VAT entrants.

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