The government has extended its museums VAT rebate scheme to two more organisations – the V&A Museum of Design in Dundee, and Embrace Arts, the arts centre at the University of Leicester.

It will also extend the rebate to the National Coal Mining Museum for England, which was previously part of the Science Museum.

The VAT refund scheme covers a group of around 60 organisations, most of them charities, which together run around 120 major museums which are free to the public. The scheme is worth around £60m a year to the charity sector.

Most charities which operate non-business services are unable to reclaim VAT. The sector as a whole faces an irrecoverable VAT bill which could be more than £1.5bn a year, according to estimates by the Charity Tax Group.

However the government has introduced a rebate scheme for museums, and also for academy schools, which allows them to reclaim the VAT they pay.

Charities have continually lobbied for VAT relief for other organisations which provide government services, especially those where there is an equivalent state service which already receives VAT relief. Organisations such as hospices and Mountain Rescue and Cave Rescue charities are negotiating with government over potential reliefs.

David Gauke, the financial secretary to the Treasury, said: “The UK’s museums and galleries are a source of great education and interest, attracting visitors from all over the world. The government is committed to supporting them and ensuring they can be accessed by as many people as possible, through the VAT refund scheme.

“Extending the scheme will support more museums and galleries to open their doors, free of charge, for the public to enjoy them.”