How much does Download cost...

[gary1979666]

VAT is VAT. If you run a business then you are just an unpaid collector for HMRC. Neil you think like a punter rather than a business owner and that's a worry, does someone else run your books? I hope so! VAT hurts when you see it leave your account as does corporation tax but if you aren't making a profit you won't be paying any. <kept deliberately simple>

[neilloggie]

Yeah I know U2 are and before Glasto last year they moved their 'company' to Holland to save on VAT and there was a big 'Whoha' (greedy bastards).

[gary1979666]

As they are Southern Irish i don't know why so many people got upset about it

[neilloggie]

With VAT you can't automatically assume that if you have paid out £4million in VAT you will get it all back. I Think 10% would be a realistic net profit, a festival the size of Glastonbury only generates around £2 million profit which goes to charity.

[eFestivals]

VAT is VAT. If you run a business then you are just an unpaid collector for HMRC. Neil you think like a punter rather than a business owner and that's a worry, does someone else run your books? I hope so! VAT hurts when you see it leave your account as does corporation tax but if you aren't making a profit you won't be paying any. <kept deliberately simple>

I do my own books. I can add up and substract without any problems thanks. I don't need to pay someone less smart than me to do it for me.

It's not me who is thinking like a punter - it was a punter thinking like a punter and so ignoring the VAT implications on ticket money which had me posting.

The VAT that has been collected is not an irrelevance that can be ignored. It is not the case that Download will not be giving the vatman anything, they will be giving the vatman a very significant sum from the vat they collect from their sales.

If any business is thinking "everything I collect in vat on sales will be negated by expenses" that is a business that will go tits up VERY quickly.

[AcademicPistol]

As they are Southern Irish i don't know why so many people got upset about it

[devilman]

You can't be VAT registered to think like you do. Anyways, If they haven't got it covered then they deserve to go under. Given that Mr Copping doesn't look to be wearing sack cloth in the interviews I've seen him in, I suspect they make a tidy profit.

[eFestivals]

OK - accounting 101

In your example you have a profit and loss account of :

Sales 20m

Costs 24m

Net loss 4m

There is no VAT here.

Fuck me, you should be sacked.

Whether there is VAT that is due to be paid to the vatman is dependent on whether vat is paid on the expenses - which there won't be on booking Metallica.

All sales incur vat. All expenses do not. The difference is what is paid over to the vatman in net vat.

Typically around half of the vat collected in sales is handed over to the vatman. For Download that will be in excess of £1M.

Ignoring an outgoing of around £1M will certainly impact on the P&L's.

I think we are arguing the same point from different assumptions. AC's 15m of costs will not include any VAT, as all the info the numbers given to him would be without VAT. I assumed you were talking about figures without VAT, as it was a discussion about the net profit margin and I've stressed in my posts that I'm talking about profit,not cash / takings.

At the point where I made my first post, someone was adding up all of the ticket money - including the vat that is charged on that ticket money - but ignoring that fact of the VAT. Which is why I posted to say it includses vat.

You then said all that is collected in vat is equalled by vat paid on expenses. That is not true, and I posted to point that out.

My posts were perfectly made. Your own were not.

The fact that you're an accountant means diddlysquat when you post wrong bollocks.

[gary1979666]

The VAT that has been collected is not an irrelevance that can be ignored. It is not the case that Download will not be giving the vatman anything, they will be giving the vatman a very significant sum from the vat they collect from their sales.

[eFestivals]

You can't be VAT registered to think like you do.

Do fuck off, eh?

I've been running vat registered businesses for 15 years.

That's a different thing to doing the vat on someone else's businesses, where none of the mistakes you make mean fuck all back on you.

I have to make all of the money work in all directions, not just pay around with things on a theoretical meaningless 'paper' basis. It ain't me that's mixing two different concepts here.

[AcademicPistol]

You can claim VAT back if your VAT registered but i know that has been brought up already and i don't know about these things but would there be corporation tax or whatever they would have to pay?

[eFestivals]

Yeah they'll hand over a load of VAT money to HMRC, but that will never have been near their profit forecasts - it's essentially put aside as the government's money.

PMSL.

Come back and say that when you're running your own business and not just working on a small part of the accounts of someone else's.

There's few businesses that are running at a profit rate of greater than 20%, meaning that they can't afford to physically put 100% of the vat money into a separate account (unless they have a big float, or run overdrafts on the other accounts).

From a paper point of view, what is put in the books, what you say is correct. From a real world point of view, from actually managing real money, it's tosh.

Profit is important for a business, but cash is king.

that's what Game were saying just a few weeks ago. How wrong that idea was for Game was proved just yesterday.

You need to regurgitate the books you've swallowed else you'll be adding to why this country is going down the pan. There is no accounting fiddle that can negate the need for profit over the need for cash.

[neilloggie]

What does being from the Republic of Ireland have to do with them moving there 'company' to tax haven Holland?

Bono is the crap!

[biffoire]

Yet ... if they booked Metallica 24 times.

[gary1979666]

Fuck me, you should be sacked.

Whether there is VAT that is due to be paid to the vatman is dependent on whether vat is paid on the expenses - which there won't be on booking Metallica.

All sales incur vat. All expenses do not. The difference is what is paid over to the vatman in net vat.

Typically around half of the vat collected in sales is handed over to the vatman. For Download that will be in excess of £1M.

Ignoring an outgoing of around £1M will certainly impact on the P&L's.

[eFestivals]

That would be such a boring and predictable booking.

but in just a few more years, that's what Download will have done.

[gary1979666]

PMSL.

Come back and say that when you're running your own business and not just working on a small part of the accounts of someone else's.

There's few businesses that are running at a profit rate of greater than 20%, meaning that they can't afford to physically put 100% of the vat money into a separate account (unless they have a big float, or run overdrafts on the other accounts).

From a paper point of view, what is put in the books, what you say is correct. From a real world point of view, from actually managing real money, it's tosh.

[jump]

Because it's for them to sort out, especially when we have far bigger tax dodgers in this country

[eFestivals]

Fuck me - you should be audited!

Not all outgoings hit your profit and loss account. Similarly incomings. Do you even know what profit is? It's not the same as cash. Understand what a balance sheet is? Or does efestivals simply look at the bank balance at the end of the month just hope it's in the black?

I have no need to be audited, cos I do everything straight.

I know what things are called thanks.

But they're all meaningless bollocks, terms cooked up by accountants to fiddle things, to make the insolvent appear to be something else.

If I sell something, I have to charge vat. If I buy something, I have to pay vat.

Pretending it's different to that within a company's books is ignoring the reality.

The only things which matter to ANY business are its incomings and its expenses/liabilities. Pretending that it's something different to that is merely accountant's pretence.

As Devilman said earlier - it's not an expense to the business, you're collecting it on behalf of the government, so why should it form part of your P&L.

if a person includes that vat money as the business's money, then paying it to the govt certainly comes into the P&L.

Never said the input VAT equalled the output VAT. My point was that regardless of the values, they didn't come into the picture where profit is concerned.

It does when someone includes the vat money as that business's money.

This is just my estimate but if they sold roughly 75,000 tickets at £180.00 that would equate to £13,500,000 and the money from the stallholders, bars, zippo, pepsi max, jagermeister, locker rental and car parking etc should be enough to keep everyone sweet.

not forgetting that there's 20% VAT on all of that to be paid.

But if they're VAT registered, then they claim that back

Not all of it.

Download is likely to collect something like £4M in vat. At a guess (based around the averages), they're likely to only claim back half the vat they collect.

So around £2M of what they take in sales is likely to have to be handed over the VATman.

[devilman]

It would appear that getting into a hissy fit, spitting the dummy and telling people to fuck off is what 15 years of accounts management teaches you. It doesn't work with HMRC though so listening to pro's like geoff will help should you ever be audited. Managing the cash in the account is not the same as running the books which is where you appear to have got stuck.

[eFestivals]

Working on a £60m business. If it were my own, would do it in the same way (maybe less time arguing in forums though

Nah. What you mean is that you'd get a junior account clerk to work it the same way.

The Financial Director is not thinking in that way, I guarantee.

That's what i said. It's all very well having a profitable business, but if you've got no cash, then you're screwed.

You can have all the cash in the world but if you owe twice as much as you have then there's fuck all you can do.

Game had cash but no profitable business. I have a profitable business but no cash.

Only one of us is viable today.

[eFestivals]

It would appear that getting into a hissy fit, spitting the dummy and telling people to fuck off is what 15 years of accounts management teaches you. It doesn't work with HMRC though so listening to pro's like geoff will help should you ever be audited. Managing the cash in the account is not the same as running the books which is where you appear to have got stuck.

I've got stuck at nothing. My words were 100% perfectly placed.

And here's the proof......

This is just my estimate but if they sold roughly 75,000 tickets at £180.00 that would equate to £13,500,000

Care to show me where an allowance for VAT has been included within that?

I was simply pointing out that the first thing to be deducted from that stated "income" is VAT at 20%.

gary then claimed that the vat paid on expenses would equal what was collected. I stated that was wrong, because it is.

[devilman]

I've got both and 50%+ profit margin so

Learning how accountants think is essential IMHO.

[devilman]

I've got stuck at nothing. My words were 100% perfectly placed.

And here's the proof......

Care to show me where an allowance for VAT has been included within that?

I was simply pointing out that the first thing to be deducted from that stated "income" is VAT at 20%.

gary then claimed that the vat paid on expenses would equal what was collected. I stated that was wrong, because it is.

[eFestivals]

Learning how accountants think is essential IMHO.

it is, but only as long as you don't go believing that it's the only way to think.

Accountancy only exists as a scam. It's a more hypothetical thing than the next most hypothetical thing that exists.

Accountancy is bollocks, designed only so that it's impossible to add up all the numbers and find out that they never add up.

Edited April 2, 2012 by eFestivals