Share

VAT ruling could 'open the floodgates' for cultural admissions

VAT ruling could 'open the floodgates' for cultural admissions
News

VAT ruling could 'open the floodgates' for cultural admissions1

Finance | Tania Mason | 13 Feb 2013

A recent decision by the tax tribunal in favour of the British Film Institute could open the floodgates for more cultural charities to claim their admission fees should be exempt from VAT.

Last year, the BFI brought a case before the First-Tier Tribunal (Tax and Chancery) that the VAT exemption that already applies to “cultural services” such as museums, art galleries and theatre performances should also cover admissions to cinema screenings hosted by charitable bodies.

The British Film Institute runs the BFI Southbank and the BFI Imax (pictured), the BFI National Archive and BFI Reuben Library, and is a charity governed by a Royal Charter.

According to Withers’ VAT expert Graham Elliott, the BFI's case relied upon a direct reference to European law and contended that the UK’s interpretation of the exemption was wrong, in that it was overly restrictive.

He said the charity’s argument revolved around the meaning of the word ‘certain’, because the European legislation says certain cultural services qualify for the exemption. HMRC had claimed that this meant it could pick which ones qualify and which ones don’t, but the BFI contended that the word ‘certain’ was superfluous.

The BFI’s lawyers cited a number of previous European-level cases which made clear that the word ‘certain’ cannot be used as an excuse to deny exemptions to different types of charity.

Elliott said that the implications of the decision could reach much wider than just the BFI, or even charities that show films. “As HMRC admitted in their evidence, this is a floodgates issue,” he said. “If a cinema is cultural, in a sense what isn’t? How wide are the boundaries of ‘cultural services’?”  

He suggested that charities that run botanical gardens or stand-up comedy shows could conceivably argue now that their admission charges should be VAT-exempt.

“It does beggar a huge definitional boundary question - what will be regarded as sufficiently cultural? It does have a fairly broad application I think.”

Elliott said that HMRC may choose to appeal the decision, but he doubted it would have much success.

“It’s a very welcome development that the UK legislation had been overly restrictive and had strange omissions in it that were unfair,” he said. “The decision looks extremely convincing and if there is an appeal my prediction would be that the appeal will be unsuccessful and the decision will continue to stand.”

 Yearbook

 

Charity Finance Yearbook

The Charity Finance Yearbook is the ultimate reference source for charity finance professionals. Providing updates, advice and trends on accounting and auditing, VAT and taxation, investment and banking, social investment and funding, legal matters, governance, impact, risk, IT and HR.

Philip Anthony
Director
Co-Operative Systems
13 Feb 2013

Good news for the BFI. Completely nuts from a tax gathering and common sense viewpoint.
The largely well heeled BFI voyeurs ;) have little problem with ticket pricing -its not particularly big part of their decision making process in deciding to watch a movie and BFI ticket prices are already subsidised to well below commercial pricing.
&
For the Eurosceptics another reason to exit the EU ...

I look forward to a VAT rebate on my Sky Movie subscription!

Comments

[Cancel] | Reply to:

Close »

Community Standards

The civilsociety.co.uk community and comments board is intended as a platform for informed and civilised debate.

We hope to encourage a broad range of views, however, there are standards that we expect commentators to uphold. We reserve the right to delete or amend any comments that do not adhere to these standards.

We welcome:

  • Robust but respectful debate
  • Strongly held opinions
  • Intelligent relevant discussion
  • The sharing of relevant experiences
  • New participants

We will not publish:

  • Rude, threatening, offensive, obscene or abusive language, or links to such material
  • Links to commercial organisations or spam postings. The comments board is not an advertising platform
  • The posting of contact details for yourself or others
  • Comments intended for malicious purpose or mindless abuse
  • Comments purporting to be from another person or organisation under false pretences
  • Gratuitous criticism, commentary or self-promotion
  • Any material which breaches copyright or privacy laws, or could be considered libellous
  • The use of the comments board for the pursuit or extension of personal disputes

Be aware:

  • Views expressed on the comments board are left at users’ discretion and are in no way views held or supported by Civil Society Media
  • Comments left by others may not be accurate, do not rely on them as fact
  • You may be misunderstood - sarcasm and humour can easily be taken out of context, try to be clear

Please:

  • Enjoy the opportunity to express your opinion and respect the right of others to express theirs
  • Confine your remarks to issues rather than personalities

Together we can keep our community a polite, respectful and intelligent platform for discussion.

Tags

Free eNews

Band Aid 30 raised £1m in first day

19 Nov 2014

Band Aid 30 became the fastest-selling single of 2014 when it was released yesterday, with 206,000 people...

Society lotteries deregulation could lead to less trust in charities, says NCVO

19 Nov 2014

Deregulation of society lotteries could impact public trust and confidence in charities, NCVO has told...

UK is joint-seventh overall in World Giving Index of 135 nations

18 Nov 2014

The UK and Ireland are the fourth most generous nations in terms of giving money to charity, the latest...

RNIB chief executive criticises ‘arrogance’ of MPs who think charities must learn from private sector

21 Nov 2014

Lesley-Anne Alexander, chief executive of RNIB, yesterday said she had a “struggle with the arrogance”...

Don't lecture us on impact when government has failed to measure its own, Wilson told

21 Nov 2014

The minister for civil society was criticised yesterday for telling charities to measure their impact...

Volunteer managers say they need a stronger representative body

21 Nov 2014

The volunteering sector needs a more powerful representative body, volunteer managers have said in response...

OSCR launches new website

20 Nov 2014

The Office of the Scottish Charity Regulator has launched a new website which includes a new search function.

Data from controversial Samaritans app to be deleted

17 Nov 2014

Samaritans has promised that all data collected by its Twitter monitoring app will be deleted and the...

Post Office enables Children in Need donations through Twitter

11 Nov 2014

The Post Office has become the first UK organisation to allow Twitter users to donate to charity through...

Join the discussion

 Twitter button

@CSFinance