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01 May 2018
The potential VAT charges on donations for foreign racing events.
My client has formed a UK company that is linked to overseas events involving vintage cars. The company registered for VAT on 1 February 2018 because its first expense was to sponsor a prestigious car event in Italy at a cost of €150 000. The company needed a UK VAT number to avoid being charged Italian VAT on the sponsorship fee.
The sponsorship deal includes five ‘golden passes’ to enter the event and four UK enthusiasts have each donated €35 000 to the company in return for one of these passes each. My client will use the fifth pass for his own entry – although he will not pay a fee to the company. Other relevant facts are as follows.
- Two of the donations were received in January 2018 before the company became VAT registered.
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