Q:
I am a start up company, only recently registered for VAT. I am adding a subscription based membership to my website. I have searched through the government website and cannot find any information about VAT on subscriptions, other than that for charities. My company doesn’t come under this category. Are membership subscriptions subject to VAT, and at what rate?
Thanks
A:
Hi
The point is – what do people get in return for their subscription?
In principle membership subscriptions are liable to VAT but there all sorts of exceptions to this – for example a magazine subscription is zero-rated and certain sporting subscriptions are exempt.
Also if the subscribers get a mix of benefits in return for their payment, then you might have to apportion the subscription between the different liabilities.
There is a lot of info about this subject on the HMRC website but you have to know what you are looking for as it comes under a variety of subject headings!
If the main benefit of your subscription is access to the website then it would almost certainly be standard rated at 15%. This may help: https://www.gov.uk/guidance/the-vat-rules-if-you-supply-digital-services-to-private-consumers
Kind regards
Marie