Gs Transfer Fee & Vat

[Attilio]

Any financial experts in the house that can answer my query.

I am led to believe that like most other things, transfer fees are subject to VAT at 20%.  If that is the case is the 20% added to a £500k transfer fee or is it taken off the £500k fee, meaning the club get that bit less?  I suppose the question is, who would pay the VAT - DFC or BCFC?

 

[Cobra]

Quoted fee is VAT inclusive but I believe transfers between football clubs in the EU are relieved of VAT anyway.

[Derry Drummer]

Depends if we are VAT registered.  

 

We will be of course. Remember Rangers screwed the VAT man....

[Edin_Dee]

Dundee will be able to claim the VAT back I would think

[Edin_Dee]

1 minute ago, Edin_Dee said:

Dundee will be able to claim the VAT back I would think

Sorry got that wrong. Birmingham can claim the VAT back. It will probably be £500k plus VAT

[Derry Drummer]

The fee is £500k. That's including the VAT. 

 

But the VAT is waived in the EU so we don't pay anything.  

[cookie]

12 minutes ago, Derry Drummer said:

The fee is £500k. That's including the VAT. 

 

But the VAT is waived in the EU so we don't pay anything.  

This is not correct DD. Only transfers between EU clubs have the VAT waived.  Domestic transfers between clubs in the UK are subject to 20% Vat as any other sale of goods and services.   This means that the selling club are required to pay the IR any VAT collected and the buying club can claim the VAT back on payments made.  I am quite sure that transfer fees as reported are net of VAT.

 

[JoeCovenant]

What *I* never quite understand is.. what are these add-ons that will amount to almost another half mill...?

[Prince Buster]

47 minutes ago, Derry Drummer said:

Depends if we are VAT registered.  

 

We will be of course. Remember Rangers screwed the VAT man....

If you turn more than a certain amount PA you have to register for VAT. I think it's £85,000 or thereabouts so the club will have to be VAT registered.

[RossDee01]

1 minute ago, JoeCovenant said:

What *I* never quite understand is.. what are these add-ons that will amount to almost another half mill...?

I would imagine it will be something along the lines of a sell on fee percentage. Or maybe if they get promotion they pay us a certain amount. Or we get a payout when he scores a certain number of goals or makes a certain number of appearances.

Could be any of them really. 

[Derry Drummer]

Just now, Prince Buster said:

If you turn more than a certain amount PA you have to register for VAT. I think it's £85,000 or thereabouts so the club will have to be VAT registered.

Yes but certain things in the EU are VAT exempt.  

Nappies, baby milk and football transfers 

[JoeCovenant]

Just now, RossDee01 said:

I would imagine it will be something along the lines of a sell on fee percentage. Or maybe if they get promotion they pay us a certain amount. Or we get a payout when he scores a certain number of goals or makes a certain number of appearances.

Could be any of them really. 

Wonder if we'll ever find out!