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Are football season tickets tax deductible?

Many businesses purchase season tickets for their local football team. These can be used for business entertaining, as incentives to reward staff, or given away as competition prizes.

However, it’s important to understand how football season tickets are treated for tax purposes.

The VAT rules

If the season tickets are for mixed use, some of the VAT can be claimed back, but it is not straightforward. VAT for staff use is different to corporate entertaining.

At each football match, a log must be kept of the attendees and they must be categorised by business contacts (which can include suppliers and customers) and staff receiving benefits. If staff at the match are official representatives of the company and their role is to entertain the clients, they can be treated as entertainment attendees for VAT purposes.

At each VAT accounting period (usually quarterly) the proportion of the season ticket used for business entertainment is calculated and the VAT for that portion can be claimed back. There is no VAT refund for staff benefits.

Though a season ticket is a one-off purchase, for VAT purposes the cost has to be spread over the length of the season. For example, if a business purchases a number of season tickets valued at £10,000 including VAT, and the football season lasts nine months, the monthly cost is £10,000 divided by nine which equals £1,111. The VAT on this amount each month is £248. If a third of the attendees in a particular month are for business entertainment, then the VAT amount on this is £83 and this should be recorded as output tax on the VAT return.

Corporation and income tax

Business entertainment is disallowed as a tax deduction, so the entertainment use of football season tickets cannot be used against profits to reduce tax.

If an employee attends a match as a staff benefit, it is part of their salary for income tax purposes. The value of match attendance needs to be calculated based on a proportion of the cost of the season ticket. This amount can be entered on a P11D tax form. Alternately, a business may make a PAYE settlement arrangement and pay the tax on behalf of the employee at the end of the tax year.

Keep records

A football season ticket is a useful way of entertaining business clients, as well as rewarding staff achievements. The tax arrangements are not straightforward though; records of match attendees must be kept and VAT and tax returns must accurately calculate the cost of each person attending.

After filling VAT, PAYE and company tax returns, be prepared for the possibility of tax inspectors asking to examine records for your football season ticket purchases.

To make sure that season ticket records are accurate, and all tax rules are compiled with, use an accountant. They will take care of all the recordkeeping and tax responsibilities for you. All you, your clients and staff need to do is enjoy the games, and perhaps invite the accountant along to one of the matches!

Posted by Mark
August 2, 2018
Accounts

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