Recently, the UK Government’s budget for hosting the London 2012 Olympics had to be revised upwards to £9.3bn, after taking into account previously overlooked costs – among them VAT. UK) 19 July 2012
London 2012 is expected to attract approximately 5.5 million daytime visitors and 900,000 overnight visitors from all over the world, bringing great opportunities for businesses to expand into the UK, for UK businesses to gain new customers and for all to create new trade links.
But, Accordance’s Head of Consulting, Andy Spencer, adds a note of caution.
“Businesses should be careful not to fall into the same trap as the UK Government when it comes to VAT,” says Andy. “VAT is one of the first taxes that most businesses will encounter when trading cross-border, but it is also one of the most overlooked.”
A major concern for many businesses will be whether they can reclaim VAT they have been charged -particularly for non-UK businesses trading in the UK for the first time. Businesses often incur a lot of VAT that is recoverable, when they engage in cross-border transactions, including VAT related to land related services, events, exhibitions and conferences and travel and expenses.
Both EU and non-EU companies can recover VAT; even if a business is not registered in the UK, VAT can still be recovered through the Cross-Border Refund Scheme.
“It’s important to consider that although VAT on many invoices will be recoverable, it’s crucial that the VAT was charged correctly in the first place,” says Andy. “In addition, there are restrictions as to what can be recovered, so it’s best to check local tax authority regulations.”
Exhibitions, conferences and events
In the run up to, and during London 2012, events, conferences and exhibitions are on the rise, with many hospitality events, trade shows and business conferences all trying to showcase the lucrative investment opportunities the UK has to offer.
“Events are one major area where VAT must be on a business owner’s mind, because they often create liabilities earlier than some other types of transactions,” Andy explains.
The place of supply differs from the norm where events are concerned in so far as, admission to events for business customers are subject to VAT in the country where the event takes place.
“Organisers will need to review EU VAT registrations, as the need to be VAT registered depends on the services supplied in each country, with supplies of stand rental being an area where there is a difference of interpretation between Member States,” Andy adds.
If your company organises an event, an exhibition or a conference in a different EU Member State than one you are already registered in, you must consider the need to register for VAT (advance sales of admission tickets may trigger the requirement to register for UK VAT) but there is also a more general requirement for an organisation to register for VAT when the value of its taxable turnover exceeds the VAT registration threshold. For business trading into the UK because of London 2012, the UK VAT registration threshold is £77,000.
“Then, as with all VAT registrations, businesses are responsible for the filing of all the required declarations and reports,” Andy explains. “This may include VAT returns, Intrastat reports and EC Sales Lists. EC Sales Lists report the value of sales being made for both goods and services, unlike Intrastat reports which just report the movement of goods, which may be particularly relevant if your company is planning on holding an Olympic centred event.”
He continues: “This is an exciting time to be doing business in the UK and there are myriad opportunities on offer surrounding London 2012, but it is important to check where you stand in terms of VAT and make dealing with it a priority.”
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For the original version on PRWeb visit: http://www.prweb.com/releases/prweb2012/7/prweb9707072.htm