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VAT tips for three-party transactions
The reader query Cricket catering produced two different answers from the experts.
The issue was whether a cricket club was making a supply of standard-rated catering to a person hosting a party at the club and was therefore liable to output tax on the meals or whether the club had no involvement in the supply because the independent caterer was invoicing the party organiser for the meals and was paid by him.
The caterer was not VAT registered (unlike the cricket club) so the chosen method produced a VAT reduction.
The experts disagreed so which outcome is correct?
Useful tips on this topic are contained in Agent or principal? (below).
Going back to the cricket club a key point is that the party organiser had no say in the choice of caterer: as part of the deal he used the club’s chosen caterer.
Contrast...
