The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
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.
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.
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
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 above in the first instance. Completing the form does not guarantee that the organisation will be granted permission to join the scheme and the final decision regarding whether or not to include an organisation on the list will be made by ministers.
HMRC have stated that the following requirements need to be satisfied before a gallery or museum can apply for permission to use the scheme:
be open to the general public for at least 30 hours per week, without exception
offer free entry, without prior appointment
hold collections in
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