BB/12A/06 VAT—partial exemption – VAT deduction by theatres on production costsBusiness Brief, Issue 12. 21 August 2006This Business Brief article announces HMRC's decision to appeal to the Court of Appeal the High Court decision in the case of Mayflower Theatre Trust Ltd (MTT) ([2006] EWHC 706 (Ch)). It also provides guidance for theatres affected by the High Court decision.BackgroundAs a result of HMRC's revised policy on the application of the cultural exemption announced in Business Brief 28/03, many theatres claimed exemption for their supplies of admission. In making claims for output tax previously charged in error, theatres had to also adjust their input tax deduction. This led to disputes over how the costs of staging shows (production costs) are used by theatres; including MTT.In this case, HMRC maintained that none of the input tax on production costs was deductible because they related solely to supplies of exempt admission.
Business Brief, Issue 12. 21 August 2006
This Business Brief article announces HMRC's decision to appeal to the Court of Appeal the High Court decision in the case of Mayflower Theatre Trust Ltd (MTT) ([2006] EWHC 706 (Ch)). It also provides guidance for theatres affected by the High Court decision.
As a result of HMRC's revised policy on the application of the cultural exemption announced in Business Brief 28/03, many theatres claimed exemption for their supplies of admission. In making claims for output tax previously charged in error, theatres had to also adjust their input tax deduction. This led to disputes over how the costs of staging shows (production costs) are used by theatres; including MTT.
In this case, HMRC maintained that none of the input tax on production costs was deductible because they related solely to supplies of exempt admission.
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.