VAT reclaim opportunities for attractions and restaurants

If you are the operator of a VAT registered attraction or restaurant here in the UK, there might be areas where VAT can be reclaimed.

This applies to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and facilities but not where the fee is already covered by the Cultural VAT exemption.

As you will recall the VAT rate was reduced during the pandemic on ticket sales for such attractions. Initially, this was from 15 July 2020 and to a rate of 5% which was in place until 30 September 2021 and then a rate of 12.5% up to 31 March 2022, when it returned to 20%.

As well as ensuring that you applied the correct VAT rates during these periods there are likely to be many customers who brought tickets prior to the pandemic at the full rate of VAT but used them during the reduced rates period July 2020 – 31 March 2022. Where this applies HMRC has a concession which allows the rate in force at the time of consumption to be used (ie the reduced rate) instead of the rate at the time of purchase – if this applies the difference in VAT can be reclaimed by the operator (technically up to four years from the sale taking place).

If you take as an example a theatre ticket for an event or performance which was sold for £120 (including 20% VAT) prior to the pandemic. If this was used during the lockdown period when the VAT rate was 5% then the difference of £15 can be reclaimed.

At a time when it is important to focus on cash flow and maximising revenue it is prudent to review if there might be areas like this where VAT has been overpaid and it can now be reclaimed.

If you would like to review whether your business has maximised the reduced rates or could benefit from reclaiming VAT, get in touch with our team today.