Will the VAT Cut Affect Ticket Prices?

Received from a reader…

I am not sure if this is correct but are tickets for sports events, such as football matches, subject to VAT at the normal rate? If so, is there a way of checking if the prices of tickets for sports events are reduced from Monday following the announcement by the Chancellor. For example if West Ham are selling tickets for a forthcoming home game at £35, will the be reduced by 87p?

Perhaps you can look into this and invite examples to your blog. If prices aren’t reduced, it would blow a massive hole in the Chancellor’s announcement.

Without going into the politics of this, the cut in VAT will have absolutely no effect on ticket prices at football matches, except to give the club a small extra profit margin. If a ticket is sold for a game this Saturday for £45, the VAT on that is £6.70. For a game next Monday the same ticket of £45 would have a VAT component of £5.87. So the club makes an extra 83p profit for every ticket sold after 1 December. They may well, as a gesture, reduce ticket prices for the odd game so as not to be seen as profiteering. But in essence, they are only obliged to give the government 15% of whatever the same price is of what they are selling. They are not obligated to reduce prices by 2.5% from 1 December.

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8 Responses to Will the VAT Cut Affect Ticket Prices?

  1. Tony says:

    And I have to say, I think that is the approach that almost every retailer/service provider in the country is likely to take with regard to the VAT decrease – and I must say, understandably so if for no other reason that the cost of changing VAT rates in terms of changes to systems and repricing of goods has been completely overlooked. In short, Brown and Darling have really cocked it up this time because the minimal reduction in rate will have negligible effect on consumer prices and do bugger all to stimulate the economy.

    Not WH related, I know; but had to get that one off my chest anyway.

    COYI!!!!!!!!!!!!!!!

  2. Roshi says:

    Perhaps you know Iain, but instead of all these complicated procedures with vat etc. why didn’t they just reduce income tax which would mean much more to the general public…again not WHU..sorry

  3. Goatygav says:

    Totally agree with Roshi and Tony. The 2.5% decrease will not make a significant enough difference to stimulate consumer spending in the way Darling or Brown are hoping. Seeing that Businesses claim back VAT anyway it won’t make a blind bit of difference to them. An income tax reduction, however, would’ve given us all the feel-good factor that would’ve had an effect on our purchases of goods and service.

    I worked for a well known, but now non-existent, high street branded retail chain when the increase came in from 15 to 17.5%. Didn’t make a blind bit of difference – was just a major pain in the neck changing all the ticket prices and EPOS systems.

    Insofar as the gate price at footie is concerned I think it would depend on how the receipt/invoice is made out. If they’re quoting an ex VAT figure then displaying the VAT content then surely they should adjust their price accordingly. If the customer reciept doesn’t display the VAT it would be easier for them to retain the spare 2.5% as extra margin. So I reckon they’ll keep hold of it as, last time I looked, they didn’t quote how much VAT was charged on the receipt.

  4. the headmaster says:

    As usual this is a measure aimed at business and not the consumer. We just get to pick up the tab from 2011. Tory / Labour – all the same.

  5. Goatygav says:

    Back on the field of play it looks like Tristan may get a run out in the reserves tonight.
    http://www.echo-news.co.uk/sport/football/westham/3877031.Tristan_returns_in_strong_Hammers__reserve_team/

  6. Paul Radley says:

    Amazing – West Ham fans discussing VAT and income tax. If only the Daily Mail could see us now. Whats the betting that prices go up at the alternative universe that is Upton Park

  7. Martin of Surbiton says:

    Actually a £45 ticket should be 96p cheaper, which would mean that the club could easily do “£1 off every ticket” without making it too difficult for themselves and it would give them a chance to do something for us cash-strapped fans.

    (Do delete if you think this is too much arithmetic for one blog…..the current VAT on a £45 ticket is, as you say, £6.70, so the pre-VAT price is £38.30. 15% of that is £5.74 and £6.70 – £5.74 = 96p. Ta-da or is it QED? Also, the price of all goods *should* go down by 2.1% not 2.5% as in this case from £45 to £44.04)

  8. enlightenedone says:

    Somehow i don’t think reducing the second highest ticket prices in the entire league by 83p or even £1 is going to see the return of those thousands of working class fans who were priced out of the game years ago. You remember them, they used to create genuine atmosphere at Upton Park, not the fake, sterile one we get now inbetween long periods of total silence during which you can actually hear the players yelling at each other. Now, reduce the price by £30 and only then will the ragged mob of true east end passion once more fill our stadium. So, basically they can stick their VAT reduction where Chelsea’s blue flag is protruding from.

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