Sorry - I meant that - don't know why I said "added". I suppose it's no different to buying any other consumer item.
I also believe transfer fees are a supply for Vat purposes. So if Mawson was £6m then likely £1m to HMRC
If ST costs £300 and £50 goes to the club that's just over 16% - is that the VAT rate on tickets whilst it is 20% on other goods?? Are there circumstances when VAT can be reclaimed - (you'll rightly gather that this is a subject I know nothing about - any information much appreciated!)
The club could reclaim VAT on costs included in the production of the season tickets. Otherwise no (I think). To work out the VAT on a VAT inclusive item (so the season ticket at 300 quid) you work out 1/6 of the VAT inclusive price. So 1/6 of 300, which is 50.
The service costs £250. The vat at 20% is £50. Total is £300. Vat can be claimed as input tax if the Club is making taxable supplies either Standard or Zero rated. Taxable supplies are sales of goods and most services. There are special rules if the club were to make exempt supplies (insurance services, rental income) I would guess that the majority if not all of the club's supplies are taxable. Notice I said GUESS .
I'm not 100% sure but I think that the input Vat on all supplies* made TO the club would be recoverable as the club is only making taxable supplies. * not including items specifically disallowed such as vat on a new car
BFC Dave you seem to be clued up on this subject so, if we buy a player for 500k and sell him for 1m do we have to pay capital gains tax ?
Good 'un. My understanding is, and I'll concede that I could be wrong on this matter. If player is bought by the club and sold as in the example you give, then the cost forms part of the club's expenditure and the sale part of its income. If this one deal was in isolation then the club would have a taxable profit of £500k upon which, after any losses brought forward, it would pay corporation tax at the current rate of 19%. If the club developed a youth player and sold him for say £1m then that would be a chargeable gain for corporation tax purposes and also be subject to corporation tax at 19% subject to available losses.
Dunt worry Dave - he promised/threatened to do it in 2002 if Mike Sheron got ten goals. Dint go through with it.
So if we buy a player for £500k, and then at the end of two years release them for free we can write it off as a loss? (for tax purposes to offset any profit)
I suppose the same would apply to a player that we got on a free transfer and sold for profit . Very interesting and thank you for taking the time to reply . It's a bloody mine field .
I think that the transfer fee paid is written off over the length of the player's contract. So if you gave a player a four year contract and paid £500k then this should be amortized at £125k per year or earlier if the contract was terminated. Again I have to say I'm not certain about this treatment so if anyone has better info please join in.
