Understanding VAT on Event Tickets in the UK

A common question we get from event organisers is whether event tickets sold in the UK to the general public are subject to VAT. The answer is maybe. Event tickets sold in the UK are not always considered the income of the music venue and, in these cases, would not be subject to VAT for the venue itself. The main test that needs to be applied is what is known as “Agent vs. Principal”.
To put this into context, below are four examples of common transactions in live events, and how this principle would be applied to your ticket revenue when selling in the UK, this can help you to calculate the VAT you may, or may not, owe on event tickets.

When the Venue Hires the Artist: VAT Implications for Ticket Sales

Looking at your VAT liability by applying the rules of “Agent vs Principal" to this scenario, event ticket sales are clearly the income of the venue so they are considered the “principal”. The venue hires the artist at an agreed rate and takes on the responsibility for event ticket sales, so any associated VAT lies with the venue.

When the Promoter Hires the Venue: VAT Implications for Ticket Sales

In this instance, an artist or promoter hires the venue and the venue acts as a receiving house. This is often the scenario which causes the most confusion: does the venue pay VAT on event ticket sales when a promoter or artist has hired the venue? The answer here is usually no.

The artist/promoter receives 100% of the ticket income, and the venue is paid a fee for the hire. Here, the venue is considered the “agent” as it is simply collecting the funds to pass on (if they have a ticketing allowance at all). Consequently, the event ticket sales are not the venue’s income and thus not subject to VAT in the venue’s hands.

Shared ticket proceeds: VAT Implications for Ticket Sales

What if an agreement is made to share the ticket proceeds on a fixed percentage basis? For example, 75% to the artist/promoter and 25% to the venue.

How this is treated will depend on the agreement between the two parties. This would likely be considered a joint venture, and as long as the agreement does not establish a partnership, each party would only need to account for VAT on their own share of the income of the event ticket revenue.

Under the VAT rules of ‘Agent vs Principal’, the venue in this scenario would be the principal for their share of the proceeds and the agent for the artist/promoter's share.

VAT on guaranteed artist fees: VAT Implications for Ticket Sales

This situation looks similar to the previous example but introduces more complexity due to the minimum guaranteed amount for the band. The issue here is that the band assumes no significant risk, with all the risk falling on the venue.

For instance, using the 75/25 split but with the artist having a £1,000 minimum guarantee:

 • If ticket sales are £2,000, the venue would receive £1,000 and the artist £1,000.
 • If ticket sales are £10,000, the venue would get £2,500 and the artist £7,500.
 • If ticket sales are only £500, the artist would still receive £1,000, causing the venue to lose £500.

In reality, this arrangement is more similar to the first example, though it involves a variable fee rather than a fixed fee. It’s crucial to document the intentions for each transaction thoroughly. In the event of an inquiry by HM Revenue and Customs (the regulatory body who deal with ticket revenue VAT in the UK), then documentation will likely be required to prove your arrangement and what VAT you paid.

In Summary

VAT is a complex area and you should always take advice on your own specific situation. Good Show, its directors and staff, cannot be held liable for any action or inaction taken as a result of this article.

Should you require advice in this respect, please talk to your accountant.

Written in collaboration with Magee Gammon chartered accountants and tax & business advisors