EU VAT changes mean double tax for UK livestream events.
The UK’s VAT system shares most features with the EU system and so it usually avoids any possibility of double or non-taxation (double tax treaties usually exclude VAT and so there is no protection there). What this means is that if the EU reforms its rules (and the UK doesn’t respond) anomalies will arise.
On 1 January 2025, that is exactly what will happen for some businesses as the EU will change the way it taxes livestream events provided to private individuals.
The UK and the EU VAT rules for electronically supplied services (for example downloading pre-recorded music) are aligned: if the customer is a private individual, VAT is due wherever the customer is located. By contrast, livestream events (which could include training delivered live as well as entertainment) are taxed wherever the supplier is based. However, from 1 January 2025, the EU VAT rules are changing to bring livestreams in line with other electronically delivered services. The UK VAT rules for these events are not changing. This means that from next year, if a UK business is livestreaming an event open to EU consumers, it will have to charge UK VAT and EU VAT to those EU consumers. By contrast, an EU hosted event will not charge VAT to UK consumers.
The good news for businesses delivering events to other businesses is that these VAT rules are not changing. However, to take advantage of this treatment, a UK supplier is required to prove that its customer is in business. Of course, this might present significant practical difficulties as it requires every customer to provide sufficient evidence of its status to satisfy HMRC.
In the run up to the UK’s departure from the EU, many businesses were forced to restructure their operating model to avoid disruption to existing customer and supplier relationships. Unless HMRC takes action soon, many UK businesses in this sector will have to consider similar changes to their business model or face the prospect of operating on an uneven playing field with EU competitors.
Any business offering livestreamed events, whether they are music events, training courses or comedy gigs, should think carefully about these new rules to avoid the prospect of double taxation.
EU VAT changes mean double tax for UK livestream events.
The UK’s VAT system shares most features with the EU system and so it usually avoids any possibility of double or non-taxation (double tax treaties usually exclude VAT and so there is no protection there). What this means is that if the EU reforms its rules (and the UK doesn’t respond) anomalies will arise.
On 1 January 2025, that is exactly what will happen for some businesses as the EU will change the way it taxes livestream events provided to private individuals.
The UK and the EU VAT rules for electronically supplied services (for example downloading pre-recorded music) are aligned: if the customer is a private individual, VAT is due wherever the customer is located. By contrast, livestream events (which could include training delivered live as well as entertainment) are taxed wherever the supplier is based. However, from 1 January 2025, the EU VAT rules are changing to bring livestreams in line with other electronically delivered services. The UK VAT rules for these events are not changing. This means that from next year, if a UK business is livestreaming an event open to EU consumers, it will have to charge UK VAT and EU VAT to those EU consumers. By contrast, an EU hosted event will not charge VAT to UK consumers.
The good news for businesses delivering events to other businesses is that these VAT rules are not changing. However, to take advantage of this treatment, a UK supplier is required to prove that its customer is in business. Of course, this might present significant practical difficulties as it requires every customer to provide sufficient evidence of its status to satisfy HMRC.
In the run up to the UK’s departure from the EU, many businesses were forced to restructure their operating model to avoid disruption to existing customer and supplier relationships. Unless HMRC takes action soon, many UK businesses in this sector will have to consider similar changes to their business model or face the prospect of operating on an uneven playing field with EU competitors.
Any business offering livestreamed events, whether they are music events, training courses or comedy gigs, should think carefully about these new rules to avoid the prospect of double taxation.
