National museums and galleries - VAT refund scheme

By Tolley
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The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • National museums and galleries - VAT refund scheme
  • VAT position
  • Recovering VAT under section 33A
  • VAT that cannot be recovered under section 33A
  • VAT registered organisations - making a claim
  • Submitting a refund claim for organisations that are not VAT registered
  • Extra statutory concession

This guidance note provides an overview of the refund scheme that can be used by certain cultural organisations to recover VAT incurred on costs where they allow people to access the facility free of charge.

VAT position

If a museum or gallery grants free access to its premises then it will not be viewed as conducting a business activity in respect of this facility. Normally businesses who engage in non-business activities cannot recover the VAT incurred on associated costs. However, HMRC has introduced a VAT refund scheme that enables certain organisations to recover this VAT under VATA 1994, s 33A. The organisation must be contained in a list issued by HM Treasury in order to qualify.

VATA 1994, s 33A; VAT (Refund of Tax to Museums and Galleries) Order 2001, SI 2001/2879 (subscription sensitive); The Value Added Tax (Refund of Tax to Museums and Galleries) (Amendment) Order 2005, SI 2005/1993 (subscription sensitive); Notice 998 ; De Voil Indirect Tax Service V5.162A (subscription sensitive); VBNB44200 ; VBNB44400; VATGPB4000

A list of the VATA 1994, s 33A bodies that can obtain a refund can be found in HMRC Notice 998 .

If an organisation is not currently listed as a VATA 1994, s 33A body it cannot exempt its admissions fees from VAT. If a body considers that it should be included in the VATA 1994, s 33A list its request will be considered but is unlikely to be successful unless it is supported by one of the following:

  • •Department for Culture, Media and Sport
  • •Welsh Assembly Government
  • •Northern Ireland Assembly
  • •Scottish Government
  • •Ministry of Defence

Organisations that are seeking approval to join the list of VATA 1994, s 33A bodies should write to the relevant government department or administration listed

More on Cultural services:
Importing museum and gallery exhibits
Cultural exemption
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