Why don't clubs pay V.A.T. on player transfer fees?

Neil3030

Or do they? I've googled it and it appears as though they don't.

Just strikes me that they are purchasing these players, essentially a labour asset, for the purposes of generating a profit from sales of a service on which they presumably charge VAT, so why isn't V.A.T. levied on transfer fees?

IvySlayer

I did a little bit of reading on this

Here's some info

wrote:

Agents Services
Clubs and players increasingly use agents when
negotiating the acquisition, sale or terms of the contract of
players. Agents established in the UK providing services
to a client in the UK will charge VAT on their commission.
Depending upon who the agent sees as its customer, non-
UK agents may be required to charge local VAT.

IvySlayer

And this:

Player Transfers

Certain countries charge local VAT on transfer fees for
players bought by UK clubs. The remainder do not
charge local VAT. Whilst the UK football club should
account for UK VAT under the reverse charge regardless
of whether or not local VAT has been incurred, the UK
football club may be able to obtain written confirmation
from Customs to only account for UK VAT under the
reverse charge where local VAT is not incurred. For a list
of which EU countries charge local VAT see Appendix 5.
In relation to non EU countries, the VAT treatment may
vary from country to country. Advice should be sought
on specific cases.

For UK clubs selling players VAT is charged on transfers to
other UK clubs (see also Value-in-kind/Barter
Transactions). Transfers outside the UK are VAT free. If
the recipient football club is within the EU it may be
required to account for VAT under the reverse charge.

peejay1986

Ah so this might go some way to explaining the inflated price of English players (aka Milner) in the transfer market?