NFFC Financial Talk

[Jean_claude_killy]

How does VAT work on transfers? Listening to the Price of Football podcast he said VAT is payable on transfers.

I'm no expert on tax, but it seems like you pay 20% on transfer fees. I googled it and found this, which seems a bit old, but says

"For UK clubs selling players VAT is charged on transfers to other UK clubs (see also Value-in-kind/Barter Transactions).  Transfers outside the UK are VAT free.  If the recipient football club is within the EU it may be required to account for VAT under the reverse charge."

Fwiw under the Barter transactions section

"For VAT purposes this arrangement results in both parties making supplies.Where these supplies are taxable VAT must be accounted for on the full value of those supplies i.e. it is not possible to net off the VAT amounts due between the parties. Instead both parties should issue invoices for the value of their individual supplies and charge VAT where appropriate.  Common examples are:
part exchange player transfers"

I don't know what 'reverse charges' and the like mean. Anyone speak tax?

Basically on the specific question I had, it seems VAT would be payable on the full value of a player sold in a part-ex deal, e.g. putting a large value on Worrall in a part-ex with Gibson, so whilst that would be good for FFP this year, we would be hit with 20% VAT bill on that larger value.

It is basically how you account for VAT on purchases and sales outside of the UK; you record VAT on both the purchase and the sale which cancel each other out.

That is how my Accountant explained it to me