VAT treatment of entry fees to sporting events

By default the entry fee to compete in a sporting event is VAT standard rate, but there is a VAT exemption in two circumstances.  A sporting event excludes animal shows such as a dog show, where there is no physical competition, and prizes are based on appearance only:

• The entry fee income is wholly given out as prizes (monetary or goods/services) in that event.   The exemption fails if monies are held by the provider for prizes at subsequent events
• The provider of the event is an eligible body for VAT purposes, so cannot and does not distribute profit and they are established for the purpose of sport or physical recreation.  Examples include a Not-For-Profit golf club, horse riding school, sports club or a leisure centre

The exempt entry fees will have a potential negative impact upon VAT recovery of costs. If you wish to obtain further details, please speak to the Indirect Tax Services team at James Cowper Kreston.