In a move expected to be announced later this month, museums not charging for admission will be added to section 22 of the 1994 VAT Act which enables non-business organisations to reclaim VAT. Currently museums that charge visitors an entrance fee can reclaim VAT because they are a business, but those free of charge must pay the tax.
This raises the possibility of many attractions based in England abolishing admission charges . National museums in Scotland, Wales and Northern Ireland would be unaffected by the deal because they are funded by their own parliament and assemblies.
Labour wanted to abolish entry fees while in opposition, but dropped the idea for its manifesto for the 1997 election campaign. Treasury and DCMS officials have reportedly been negotiating for six months on how to scrap charges.
As part of the ‘Quids In Scheme’, the DCMS has already agreed to subsidise national museums and from September most entry fees will drop to £1.
The DCMS confirmed discussions were ongoing, but was unable to confirm the abolition of charges at this stage.
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