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Beginner May 2014

VAT on Wedding Bookings

slbarber, 23 July, 2013 at 20:36 Posted on Planning 0 8

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Hello,

I have recently been told by my wedding venue that due to a test case brought by HMRC against a wedding venue, they have been advised by their tax advisors that VAT is chargeabale on all wedding packages, and so they have no choice than to apply it even though it wasn't in our previous quote...

Has anyone else experienced this?

Thank you

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8 replies

Latest activity by Peter, 24 July, 2013 at 14:23

Beginner August 2014
MOMB · 23 July, 2013 at 20:55
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VAT is chargeable where the income on the previous year has gone over a certain value. If your venue takes more than 79K in a year then they have to pay it and so do you.

Our venue hire includes VAT but our caterer is new so has come in under the wire, saving us 20%, though they do seem very busy this year, so by the time of our wedding next summer we may have to pay the tax.
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Beginner May 2014
Ohwhatatuesday · 23 July, 2013 at 21:01
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Ours say they include VAT
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Beginner May 2014
slbarber · 23 July, 2013 at 21:05
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Thank you - just wanted to check that this was normal!
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Wedding Photography By Bill Haddon · 23 July, 2013 at 22:19
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The rules on vat are that over a certain amount of turnover £70k odd you have to pay it at 20%, but that also means that you (venue) can claim back any vat that you have paid out for goods. You can voluntary register for vat even when you are at the threashold so that you can then claim all the vat part of what you have spent out in running your business but in return you have to add the vat to all of your sales - with some exceptions, seems like your venue has been claiming the vat on goods they buy in and maybe not adding the vat on weddings making them self's cheaper, by whatever method they seem to of found a loophole (perfectly leigit) - like the other venue, and the tax man has said "I don't think so" Seems unfair to make you pay for their mistake. You will still be paying the vat part of your fee but the fee should be reduced by that amount, so if the venue was £1000 to you + vat would be £1200 total, so they want to charge you an extra £200 for their mistake, I say the venue should be chargeing you at £834 + vat which would be £1000.80. So your cost is the same and the venue is taking the vat hit for you.
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Beginner April 2014
Northernrose · 23 July, 2013 at 22:37
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Http://www.clementkeys.co.uk/news-and-events/12th-february-2013-wedding-reception-price-hike

When did you originally book the venue? It sounds a bit fishy if you booked the venue after 22 January and they've only just told you about the additional VAT now...
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Beginner May 2014
slbarber · 23 July, 2013 at 22:52
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Thanks for all the info everyone. i really appreciate it!

we booked right at the beginning of jan so must have just missed it! i enquired about something on my booking at the end of may and thats when they said... im assuming by looking at my file they realised i hadnt been charged..

we're a bit unsure about whether to argue it with them mainly for the reason that we dont want our day feeling tense and tainted!
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mariannechuaphotography · 24 July, 2013 at 08:32
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Yeah if the venue is earning enough they get charged vat so that charge is passed onto the client. Good news is it probably means your venue isn't at risk of going bankrupt!
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Wedding Photography By Bill Haddon · 24 July, 2013 at 09:20
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Just to clear up , the venue do not get charged vat if they earn enough (turnover) its that over a turnover threshold they have to register and then its they that have to add vat on top of goods that they sell. But once registered they can then themselves claim the vat part of everything that they have paid out for, they then take that claim amount off the amount they have charged and then pass the difference on to the taxman.Thats why places like macro display the price of goods without the vat because the busines that shop there claim the vat part back so the vat part does not matter to them. But it seems as I read the OP that some part of the wedding venues income has been rated as nil rate vat meaning that they have not added and paid some part of the vat to the taxman, who has taken another venue to court over the same issue and won the case, and I think it is possible that the tax man could try and claw back 2-3-4-5 years worth of unpaid vat which would add up to a large bill.

There are many differing rules regarding vat- remember the gregs vat on pasties if you cook and keep warm then there is vat to add but if you cook and do not keep warm then -no vat to add or its called a "nil rate" so my guess is that some part of the income from weddings has been (according to the tax man) wrongly attributed to a nil rate and he wants it all back
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