VAT for May Ball Committees

VAT is one of the most misunderstood areas of May Ball finance. Many committees aren't sure whether they need to register, whether ticket prices should include VAT, or how it affects their budget. This guide covers the practical basics.

Do May Ball committees need to register for VAT?

It depends on the structure. Most Cambridge May Balls operate in one of two ways:

• Under the college: Many balls operate as a college activity, using the college's VAT registration. In this case, the college handles VAT on your behalf. Ticket income and supplier payments flow through the college's accounts.
• As an independent entity: Some balls operate as separate unincorporated associations or through their own bank accounts. In this case, the committee may need its own VAT registration if turnover exceeds the threshold.

The first thing to do is ask your college Bursar how your ball is structured and whether the college's VAT registration covers your event.

The VAT registration threshold

As of April 2024, the VAT registration threshold is £90,000 of taxable turnover in any rolling 12-month period. If your ball's total ticket and sponsorship income exceeds this, you are legally required to register for VAT.

For context, a ball selling 1,000 tickets at £100 each generates £100,000 in ticket income alone — already above the threshold. Most May Balls with significant ticket volumes will exceed it.

If you operate under the college, this is typically handled for you. If you operate independently, you need to check.

What does VAT registration mean in practice?

If you are VAT-registered (either through the college or independently):

• You charge VAT on ticket sales. The standard rate is 20%. A £200 ticket includes £33.33 of VAT and £166.67 of actual income.
• You can reclaim VAT on costs. If a supplier charges you £12,000 including VAT, you can reclaim £2,000 of that. This is a significant benefit that reduces your effective costs.
• You must submit VAT returns. Usually quarterly. The college finance office handles this if you're operating under the college.

How VAT affects your budget

The key insight is that VAT is not simply a 20% tax on top of everything. It's a net calculation: you pay VAT on income, but reclaim VAT on costs. The amount you actually owe HMRC is the difference.

For a typical May Ball:

• Ticket income of £200,000 includes £33,333 of output VAT
• Costs of £180,000 (including VAT) contain roughly £30,000 of input VAT you can reclaim
• Net VAT owed: roughly £3,333

This means the actual VAT cost to your event might be relatively modest — the difference between what you collect on tickets and what you reclaim on costs. However, you need to account for it in your budget from the start.

Common mistakes

• Forgetting to include VAT in ticket prices. If you advertise a £200 ticket and you're VAT-registered, that price needs to include VAT. Your actual income per ticket is £166.67, not £200. Budget accordingly.
• Not reclaiming input VAT. Every VAT-inclusive invoice from a VAT-registered supplier is reclaimable. Keep proper invoices (not just receipts) and make sure your college finance office or accountant knows about all costs.
• Assuming sponsorship is VAT-exempt. Sponsorship income where you provide something in return (branding, hospitality, tickets) is generally subject to VAT. Pure donations may not be, but most ball sponsorship involves a commercial arrangement.
• Not checking your structure early enough. Find out in Michaelmas whether you're operating under the college or independently. Don't discover this in Lent when you're already selling tickets.

The flat rate scheme

If your ball operates independently and has a relatively low turnover (under £150,000 excluding VAT), you may be eligible for the VAT flat rate scheme. Instead of tracking input and output VAT separately, you pay a fixed percentage of your gross turnover to HMRC. The rate for "entertainment or journalism" is currently 12.5%.

This can simplify administration significantly but may or may not save money compared to the standard scheme. Ask your accountant to run the numbers for your specific situation.

Practical tips

• Talk to your Bursar first. Most colleges have dealt with this before and can tell you exactly how your ball should handle VAT.
• Budget in VAT-exclusive terms. When planning, work with ex-VAT figures for both income and costs. Add VAT at the end as a separate line. This gives you a clearer picture of your real budget.
• Keep proper invoices. You can only reclaim input VAT with a valid VAT invoice showing the supplier's VAT number. Receipts alone aren't enough.
• Use the budget template. Our budget template has space for tracking estimated vs actual costs, making VAT reconciliation easier.
• Don't panic. VAT sounds complicated but in practice most of the heavy lifting is done by your college finance office. Your job is to keep good records and communicate with them.

Further reading

• HMRC: When to register for VAT
• HMRC: VAT Flat Rate Scheme
• Budgeting & Financial Planning guide
• Compliance, Licensing & Safety guide