Value Added Tax VAT Registration
Entertainers and Musicians
You must register in the following circumstances:-
- At the end of the month if the value of your UK taxable supplies in the past twelve months has exceeded the annual threshold (Click here for the current registration threshold)
- At any time if there are reasonable grounds for believing that the value of your UK taxable supplies in the next 30 days will exceed the annual threshold.
Please remember that HMRC will levy automatic penalties for failure to register and for the late submission of Returns. Always keep photocopies of your quarterly VAT returns.
If your turnover does not exceed the registration limits it may still be to your advantage to register voluntarily if the majority of your clients are themselves registered for VAT as you may be repaid your input tax. The amount of that repayment maybe increased if you register for the fixed rate scheme.
Please note that taxable supplies for UK registration purposes exclude engagements in other E.U. countries.
Registration in another EU Country:-
Do be careful when you are UK registered and your overseas services are supplied through a U.K. company because, although you perform overseas, you must submit a VAT invoice to that UK company and include that transaction in your VAT quarterly return. You will need to detail on your invoice that the supply is within the reverse charge mechanism and state the VAT number of your customer. This supply will be outside the scope of UK VAT but must be included and reported on your quarterly EC sales list and VAT return to HMRC. You do, however, need to add the sale to box 7 on your VAT return (sales and other inputs).
VAT -Place of Supply:-
The default rules for the place of supply for your intra EU services are as follows;
- Business to Business (B2B), i.e. where your customer is a business, is where your customer belongs. Please note that for your B2B supply your customer will be subject to the reverse charge mechanism; your customer will record both the sale and purchase on their VAT return together with the input and output VAT.
- Business to Consumer (B2C), i.e. where your customer is not a business, is where your performance takes place. If your services to an overseas consumer(s) (B2C) are above that country's VAT registration threshold then you may be required to register for VAT in that E.U. country. If you have no business establishment in that E.U. country where you are performing, it may be necessary to appoint a fiscal representative to register for VAT on your behalf. This could be a costly process as the representative would be jointly and severally liable for any VAT debts and would probably require an advanced payment or bond from you to cover any such liability. It is therefore advantageous to try to avoid registration wherever possible.
It is possible in most E.U. countries to arrange for the obligation to account for VAT to be shifted to the recipient of your services. In most cases this would be the local promoter who will already be registered for VAT in his own country. If the tax shift is allowable in that country, the promoter can declare VAT on the services that you provide and therefore overcome the problem of you having to register for VAT in that country.
This material provides only an overview of the regulations in force and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.
Click here to email Tim Dauncey for further information or if you would like to ask him a question.