How to treat sponsorship payments?

[ButtermilkJa]

I have just wrote a cheque to a local sports club for sponsorship of a Golf Event they are having. How do I record this in my books as regards VAT etc. Is there any VAT to be included? Do I need to get any kind of receipt off the sports club?

 

[Purple]

AFAIK if they are a registered charity they don't pay VAT, if not they do.

 

[HamsterMind]

In a similar vein, I supply services to a number of non-VAT registered customers who organise fundraisers. I have always invoiced them including VAT.

One of my competitors actively encourages this type of customers to find a VAT-registered sponsor and invoice through them thus avoiding VAT. I've always thought that this was a bit dodgy as the sponsoring company is not the genuine final consumer of the service and therefore Revenue will expect VAT to be paid on the sale.

If this is allowable? If so how does the sponsor account for the VAT?

Hamster

 

[ubiquitous]

One of my competitors actively encourages this type of customers to find a VAT-registered sponsor and invoice through them thus avoiding VAT. I've always thought that this was a bit dodgy as the sponsoring company is not the genuine final consumer of the service and therefore Revenue will expect VAT to be paid on the sale.

This is VAT evasion and is a criminal offence. Any party that submits a VAT claim on the basis of false invoices is leaving itself exposed to significant penalties on detection.

 

[ButtermilkJa]

I think we're getting a little off track here

Basically I just wrote a cheque for €100 and gave it to my local sports club who are running a golf classic. They will print my logo and company name beside the tee-box on one of the holes and say "Hole sponsored by...".

I just want to know if it is treated as a regular expense, like 'advertising' for example, and if so, do I claim any VAT, or ask for any receipt?

 

[HamsterMind]

Thanks Ubi. That's what I thought but it seems the practice is not that uncommon and I lose customers over my insistence on playing the VAT straight.

Hamster

 

[Dearg Doom]

I have just wrote a cheque to a local sports club for sponsorship of a Golf Event they are having. How do I record this in my books as regards VAT etc. Is there any VAT to be included? Do I need to get any kind of receipt off the sports club?

In the past I have wrote this off as an advertising expense after getting a receipt from the organisation seeking sponsorship as my business was promoted on greens/booklets/etc. There was no VAT itemised on the receipt so I didn't claim any VAT credit. I'd be interested in hearing the opinion of some of the experienced professionals around here about how this could/should be treated and of revenues attitude to such sponsorship.