Managing VAT Rates on Items Sold in Spektrix

Anne Harvey
Anne Harvey
  • Updated

On Friday 1 April 2022, the Temporary VAT Rate of 12.5% is ending. If any items you sell have been in scope of this rate you’ll need to change the rate of VAT on Temporary Rate items from Temporary to Standard (depending on their taxable status), as close as possible to midnight on Thursday 31 March 2022.

  • In July 2020, the UK government announced a tax relief plan to support theatres, museums, cinemas, galleries and other attractions. The scheme is designed to relieve some of the financial difficulties faced by the culture and hospitality sectors arising from the COVID-19 pandemic. From Wednesday 15 July 2020 to Thursday 30 September 2021, eligible items sold at the standard VAT rate of 20% can be sold at the reduced VAT rate of 5%.

    NOTE: in the UK, from 1 October, a new rate of 12.5% will apply until 31 March 2022. The new 12.5% rate has been added to your Spektrix system as T - Temporary Rate and is ready to use:

    mceclip0.png

    A similar scheme in the Republic of Ireland ended on Monday 1 March 2021; please contact the Support, Training and Consultancy team if you need any further advice.

    Things to remember when identifying items eligible for tax relief
        1. Government guidance states that “attractions” (including shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas & exhibitions) will see VAT reduced from the standard rate of 20% to 5% for items sold between Wednesday 15 July 2020 to Thursday 30 September 2021, and 12.5% on eligible items sold from Wednesday 1 October 2021 to Thursday 31 March 2022.
        2. As stated above, the reduced VAT rate is based on the date a sale is made, not the date an event is taking place. So you will need to change the VAT rate on any eligible items which could be purchased by your customers between Wednesday 15 July 2020 and Thursday 30 September 2021, or Wednesday 1 October 2021 and Thursday 31 March 2022, regardless of when the for-sale event is taking place.
        3. Some Spektrix users are already eligible for a 'cultural exemption' from VAT, and those ticket sales are already zero-rated. Even if this applies to you, it’s possible your organisation sells other items or fees at the standard rate. When in doubt, check the government guidance to verify if and how this change affects you.
        4. If the government publishes more guidance on specific items eligible for tax relief, you should find it on the HMRC Publications website.

    While we’re not tax experts and can’t advise on the particulars of whether certain items of yours qualify for reduced rate VAT, this guide will show you how to make the necessary changes in your system.

    Remember, you will need to update these VAT rates manually. This can either be done at midnight on the day of the change, or in the morning when you start work. If changing the rates in the morning from R to T, you will need to run a Payments Report to show you any transactions made between midnight and the time you made the change to your items in Spektrix to then return and repurchase so that the correct VAT rate is applied.

    On Wednesday 15 July 2020, you could start selling eligible items at the reduced VAT rate of 5% and Wednesday 1 October 2021 you could start selling eligible items at the temporary rate of 12.5%. These rates were available as Tax Code options in Spektrix, so making the switch would typically be a case of updating all eligible items' Tax Codes from S - Standard Rate to R - Reduced Rate or T- Temporary Rate. Spektrix tools like the Bulk Instance Updater will help you do this as quickly as possible, but you should expect to have to make some item changes (to Merchandise, Commissions or Memberships, for example) one-by-one. You can jump ahead in the guide to specific item types by clicking one of the below links:

If changing the rates in the morning, you will need to run a Payments Report to show you any transactions made between midnight and the time you made the change to your items in Spektrix to then return and repurchase so that the correct VAT rate is applied.

Updating VAT on Event Instances

You can use the Bulk Instance Updater to quickly change the VAT rate against select Event Instances in your system. This can either be done at midnight on the day of the change, or in the morning when you start work.

You only need to update Instances that will be on sale from the date the new VAT rate would apply (i.e. 1 April 2022), regardless of when the Instances are taking place.

To help you quickly isolate particular Instances, you may want to use Event Criteria such as:

  1. Instances that are already on sale which will take place in the future (i.e. so no past Instances)
  2. Instances that will go on sale after the new rate applies
  3. Events with specific Attributes (such as Event Type, Genre, etc)
  4. Instances that are included in the metrics
  • Filter the events you'd like to update using your preferred criteria.
    UMI.JPG
    Once you've selected the instances you would like to update, select the tax code you'd like to update them to.
    UMI2.JPG

Our dedicated guide to the Bulk Instance Update Tool will show you how to update your Instances step-by-step. When you’re prompted to select the properties you wish to change against your chosen Instances, select Tax code from section two, then choose your required rate from the drop down menu.

Updating VAT on Commissions 

You will need to update the tax rate on your Delivery and Transaction Commissions one-by-one. You can make these updates in the Admin Interface, by navigating to Pricing > Other Commissions.

From here, amending the VAT rate on each commission is simply a case of clicking Edit for each one, then selecting the correct rate from the dropdown menu. 

  • update_cmsn.jpg
    Remember to amend each Commission that requires an update.

Ticket Commissions automatically inherit the VAT rate of the Instance a sold ticket is associated with; as such, you don't need to update these anywhere.

Updating VAT on Merchandise

As with Commissions, you'll need to update your VAT rate on eligible Merchandise items one-by-one. In the Admin Interface, navigate to Other > Merchandise

From here, you will need to click on each Merchandise item to update its VAT rate.

  • merch1.jpg
    From the item’s Basic Details page, you can click the Edit button in the bottom right corner to make changes. Then it’s simply a case of selecting the correct tax code, and saving your changes.
    Merch.JPG
    Repeat these steps for each merchandise item that requires an update. You can read more about Merchandise in Spektrix in our Support Centre articles on Creating Merchandise and Selling Merchandise.

Updating VAT on Memberships

If your organisation sells Memberships that contain VAT-able elements relating to monetary benefits, you may be able to update the Tax Rate on those Membership Types depending on the HMRC guidance. In the Admin Interface, navigate to Other > Memberships. Like with Merchandise and Commissions, you will need to amend the Tax Code on each relevant Membership individually.

  • Select the Membership by clicking on its name, and you’ll see its Basic Details. membership1.jpg

     

    From the item’s Basic Details page, you can click the Edit button in the bottom right-hand corner to make changes. Then it’s simply a case of selecting the correct tax code, and saving your changes. 

    Membership.JPG

    Repeat these steps for each Membership with VAT-able elements. You can read more about the how-to of Memberships in Spektrix in our Support Centre articles on Setting Up Memberships and Selling Memberships.

Key Things to Remember

Here's a checklist to help you as you make any VAT changes in Spektrix:

  • Update your eligible Instances
  • Update your eligible Commissions
  • Update your eligible Merchandise
  • Update your eligible Memberships

 

If you have any questions about the process of changing your VAT rate on items in Spektrix, please get in touch with our Support, Training and Consultancy team by emailing support@spektrix.com