Aral Balkan

Organizing a conference is hard enough without having to worry about how to handle VAT. All VAT-registered companies (like mine) are supposed to charge VAT on ticket sales and yet no online system I've encountered so far handles this use case. (The otherwise excellent EventBrite, which I use for Update conference, is no exception.) It's like all these online systems want to ignore the fact that the VAT problem exists and event organizers are left to use other systems – and the joys of copy and paste – to handle it.

Beyond the administrative headache, charging VAT creates two price tiers: one for VAT-registered individuals and companies and one for non-VAT-registered ones. Basically, if you're not VAT registered, you end up paying 20% more for things. What this means in practice is that individuals that can afford it the least (mostly freelancers, if you think about the audience for Update) get shafted with an additional 20%. That sucks.

So what can a conference do? Well, we can absorb the VAT. We can include it in the cost and charge everyone the same price. Given that the early bird tickets for Update are £99, if that's VAT-inclusive (i.e., if we absorb the VAT), it means that the price is actually £82.50 + £16.50 VAT. When we absorb the VAT, we pay that £16.50 to the tax man and take home £82.50.

So why not just absorb the VAT for everyone? If we do that, we're giving VAT-registered companies a 20% discount. They still pay £99 but they get £16.50 of that back. So they've actually only paid £82.50. Having larger companies pay £82.50 while freelancers are paying £99 doesn't feel fair to me at all.

Another issue is that it actually involves more work on my part because VAT-registered companies require a VAT receipt. EventBrite (or any other online ticketing system that I've tested) doesn't handle the generation of VAT receipts. This means that a person (read: me) has to take time out to create a VAT receipt manually (I use FreeAgent for this) and send it over. This may seem like a small thing but multiply it by a few hundred tickets for a conference and the time it takes quickly adds up. If you were to calculate a conservative 10 minutes for communicating with the attendee, getting their invoice details, drawing up the invoice, and emailing it, it would take 33 hours for 200 tickets. So not only would VAT registered companies be getting a discount at our expense, they would also be costing us more in terms of administration costs.

So how can you solve this issue to create a system that's fair to everyone, including the conference? That's where Update's "one price for all" policy comes in.

Essentially, as a incentive to freelancers and smaller entities, we absorb the VAT for non-VAT registered entities. This is a special discount for freelancers and tiny companies that are not VAT registered. So, if you're a freelancer you pay £99, not £99 + VAT ( £118.80) for a ticket. You don't get shafted with the VAT. This is good. If you're a VAT registered company, we don't absorb the VAT for you. Instead you pay £99 + VAT (£118.80) and you get the VAT back from the tax man so you also end up paying the exact same £99. (VAT-registered companies can purchase tickets from the EventBrite site as usual and then email me – aral@aralbalkan.com – to ask for a VAT receipt. We'll send you a VAT receipt/invoice including the unpaid VAT portion at this time.)

This is fairest system I could think of. It's fair for freelancers who don't pay extra, it's fair for larger companies because they pay the same as everyone else (but don't get an additional discount) and it's fair for us because we get to offset some of the administration cost of preparing VAT receipts and manually communicating with VAT-registered attendees. Of course, ideally, we wouldn't have this additional complication to deal with but something tells me it's not going to be going away anytime soon.

Oh, and if you haven't booked your Update ticket yet, what are you waiting for? Go ahead and do it today and take advantage of our £99 early-bird tickets!