The VAT Rise

[Dave The Hedgehog]

I'm really bored so along with playing online Sudoku I've decided to do some calculations. I'm thinking ahead into the future and I'm considering the ticket prices (for all festivals) post-VAT rise.

I'm looking at two figures at the minute. The first is the rise from 17.5% to 20% (+2.5% difference):

2010 price - £175

2011 ticket increase (plus 2011 VAT) - £175/100 x 2.5% = £4.375

Ticket after VAT should logically cost around £180

The second (and fatalist figure) includes the 20% increase on top of the £175

2010 price - £175

2011 (plus 2011 VAT) - £175/100 x 20% = £35

Ticket after 20% increase - £210

Now, my grasp of economics isn't exactly top notch so can somebody tell me, will festival go-ers be looking at paying somewhere in between the two OR if one of those is right, what is the accurate figure?

Edited December 2, 2010 by Dave The Hedgehog

[kibble]

Yearly increases in price, plus the VAT increasing should mean the tickets, theoretically would be about £195, but knowing Meanfiddler they could easily get away with £200, with the excuse lying solely on the VAT increase.

[lharris92]

the way im looking at it is, the price without vat (175/1.175) is approx £150.

so if the price stays the same and only the vat goes up to 20% technically it should be:

150*1.2, which is £180 as you have said in the original figure.

however the ticket price will most likely rise, not due to vat but to cover costs, then add the vat on top, so it could end up being around £190, and then add booking fees etc it could come up to £200 i think.

if its anymore its a rip off and there should be a boycott, but realistically this wont happen.

Edited December 2, 2010 by lharris92

[Paul ™]

I reckon about £195 plus fees

[5co77ie]

I'm a little confused about this - surely the only losers in this is the festival goer? I thought Mean Fiddler would be VAT registered - so it shouldn't theoretically cost them any more in real terms - they offset their VAT purchases against their VAT sales - and so any increas at one side is balanced on the other they don't lose anything - so why increase the ticket price? Doesn't it just mean they make more profit?

[eFestivals]

I'm a little confused about this - surely the only losers in this is the festival goer? I thought Mean Fiddler would be VAT registered - so it shouldn't theoretically cost them any more in real terms - they offset their VAT purchases against their VAT sales - and so any increas at one side is balanced on the other they don't lose anything - so why increase the ticket price? Doesn't it just mean they make more profit?

That's not entirely correct.

The VAT taken in sales should always be more than the VAT paid out in purchases - after all, a company plans to make a profit.

The reality is that the gap between the two is hugely wider than just the small part that's profit, because a lot of the costs to any company don't have VAT% applied, specifically for the wages of employees.

If the costs break down similar to how they do in my company, then (after the VAT paid out on purchases is deducted) approx 10% of all sales revenue ends up going directly to the VAT man as cash.

Because acts from the USA aren't (as far as I'm aware; my own vat experience is with internal-UK payments only) within the UK VAT regime, then they are payments which nothing can be claimed back against - so I'd guess that Reading Fest pays more than the (approx) 10% of sales revenue that I do to the VAT man.

Edited December 3, 2010 by eFestivals

[DaveElNino]

Ignoring Booking Fees, 2010 Ticket Price was £180, which consisted of £153.19 ticket and £26.81 in VAT.

The increase in VAT means that the VAT cost rises to £30.64, meaning that the total ticket cost would then come in at £183.83.

Last year tickets went up by £5 on 2009, so if you factor in a similar increase, plus FR keeping prices to a nice round number we should be looking at £190 in March, which would take them to £198 including fees. As Glastonbury went to £195 I reckon we'll seem them keeping pace there.

(Also as an aside, although the VAT is increasing by 2.5 percentage points, the real increase is about 2.13%.)

Edited December 3, 2010 by DaveElNino

[bennyk]

there £192.50 at the moment including booking fee's and postage.

in march with the ticket prices constantly increasing and then on top of that the VAT + postage, im gonna say tickets will defo be over the £200 mark - hence the reason for me buying my ticket now

[Dave The Hedgehog]

in march with the ticket prices constantly increasing and then on top of that the VAT + postage, im gonna say tickets will defo be over the £200 mark - hence the reason for me buying my ticket now

[jump]

Just gonna point out that last years prices of £175 is 117.5% not a 100%, so you take the 17.5% off then add 20%. But what will probably happen is the fixed costs will go up by 2.5% plus whatever the profit contribution was from 2010 and then add the 20% onto that.

So probably over £200, not worth it for the rumoured headliners so probably off to Download instead this year.

[bennyk]

That's what I thought too.

I was aware that 2.5% will be added to the price of last year's tickets but - as somebody on here and on another thread pointed out - the naivete of some people who 'expect' the tickets to go up will just be an excuse for R&L festival organisers to bump up the prices.

Even £192 is a lot to ask when you don't even know the bands appearing, and those who are rumoured to headline aren't exactly the dog's bollocks of music. £200+ in the new year is even more to ask - they'll still get the punters in though, won't they?

[Dave The Hedgehog]

Yeah, £192 is a hell of a lot of money, however I told myself after this years fest i would be returning regardless of the headline acts. So my ticket is in the bag, im excited to go back, and 3 decent headliners would just add to the weekend imo!

[Dave The Hedgehog]

I mean, let's face it - a lot of the money from the festival kitty is being injected into the 'headliner's fund'... and a certain bit of that will come from my ticket, so technically I'd be spending money on 3 potential headliners that I don't actually like.

So whilst I'm aware that some of my money will be going to bands I like, I'll also be aware that a lot of it will be going to bands I dislike. I don't think that risk is worth £192 now and I certainly don't think it'll be worth £200+ in the future.

Looks like Leeds is off for me next year. I'll wait and see what the line-up is like and if it's any good I'll probably see if I have any money nearer the time and get one off eBay.

[Gre]

Because acts from the USA aren't (as far as I'm aware; my own vat experience is with internal-UK payments only) within the UK VAT regime, then they are payments which nothing can be claimed back against - so I'd guess that Reading Fest pays more than the (approx) 10% of sales revenue that I do to the VAT man.