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 this is not be considered to be a business activity for VAT purposes. Normally, businesses who engage in non-business activities cannot recover the VAT incurred on associated costs. However, a VAT refund scheme exists that enables certain organisations to recover this VAT under VATA 1994, s 33A (eligible body). The organisation must be contained in a list issued by HM Treasury in order to qualify.
A list of the eligible bodies can be found in VAT notice 998.
If an organisation is not currently listed as an eligible body, it cannot exempt its admissions fees from VAT. If a body considers that it should be included in the list of eligible bodies, then it can make a request for inclusion by writing to the relevant government department or administration in the first instance. Completing the form does not guarantee that permission will be granted to join the scheme and ministers make the final decision.
HMRC has 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 (see below), without prior appointment
hold collections in a purpose-built building
display details of free entry and opening hours on the museum website
Notice 998, para 1.7
HMRC also stated that newly eligible museums will also be required to complete a strategic business case as part of the application process.
Once accepted into the scheme the museum will need to provide:
evidence to confirm that they have an obligation to provide or continue
**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.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
Capital vs revenue expenditureExpenditure of a capital nature is not allowed as a deduction when calculating trading profits. Expenditure of a revenue nature is allowable, provided there is no specific statutory rule prohibiting a deduction and the expenditure also satisfies the wholly and
Legislative definition of plant and machineryThe general rule allowing capital allowances on plant and machinery is given at CAA 2001, s 11. There is no statutory definition of the term ‘plant and machinery’ but there is confirmation in the legislation on what constitutes a building or a structure
Notices of coding are the means by which HMRC notifies both the employee and the employer of the tax code to be applied to the employee’s earnings. There are several types of coding notice, as detailed below. Only one of these types of notice, form P2, is sent to the employee, the others are sent to
What is a quoted company?Reference to a quoted company is usually to a company where the shares in the company are listed on the London Stock Exchange, any other international stock exchange, or on AIM or ICAP Securities and Derivatives Exchange (formerly the PLUS market and now known as ISDX) in