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Autumn Statement - Finance Tax: Crowdfunding - VAT

Autumn Statement - Finance Tax: Crowdfunding - VAT

  • United Kingdom
  • Tax planning and consultancy - Autumn Statement

25-11-2015

EU VAT Committee review of crowdfunding

The Chancellor’s announcement follows on from the EU VAT Committee’s non-binding but persuasive views on the VAT treatment of crowdfunding. The Committee concluded that specified goods or services promised to investors in exchange for their funds in crowdfunding campaigns are liable to VAT as a taxable transaction and the VAT is payable when the cash is received from the investor. However, where investors receive shares, bonds or debt in the campaign, this is a VAT exempt transaction. The Committee also concluded that participation in future profits from intellectual property rights will be subject to VAT. The Committee found that the services of crowdfunding platforms that provide fundraising services to entrepreneurs are within the scope of VAT. The VAT treatment will therefore depend upon what is given in exchange for the funding and how it is structured.

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