Bournemouth Symphony Orchestra has failed in its latest attempt to have its ticket income treated as VAT exempt. The decision, which is likely to entrench HM Revenue & Customs practice towards arts organisations, was made by the High Court after the orchestra appealed against a decision made by the VAT Tribunal last year. UK tax policy changed in 2002 when the European Court of Justice ruled that London Zoo qualified for VAT exemption on ticket income. Since then, many arts organisations have reclaimed overpaid VAT.
According to Revenue rules, an organisation must be ?managed and administered on an essentially voluntary basis? in order to qualify for exemption from VAT. However, BSO?s Managing Director was also a board member, which led to the High Court?s decision. Simon Baxter, indirect tax director at Deloitte which represented the orchestra, said, ?BSO is exactly the sort of organisation to which the VAT exemption was intended to apply?Charities providing cultural services throughout the UK are severely affected by the 17.5% tax charge on their ticket income. It appears clear that Customs will continue to allow exemption on the narrowest basis possible.? BSO is now planning to take its case to the Court of Appeal.
Published: 01-08-2005