Finance chiefs at the London Zoological Society are to attempt to reclaim millions of pounds in VAT from Customs in a hearing at the European Court of Justice later this month.
Accountancy Age has learned the society, which runs London and Whipsnade zoos, hopes to recover between Pounds 5m and Pounds 10m. But the hearing, on 26 September, will be a test case which hopes to win back Pounds 20m to Pounds 30m for up to eight charitable zoos.
Advised by Ernst & Young VAT experts, the zoos claim they should not have been paying VAT on admission charges since 1990. Norman Reed, finance director at London Zoo, said: ‘It’s a huge amount of money. It would go a long way to producing the comfort the society needs for a really bright future.’
E&Y VAT partner Martin Scammell and London Zoo are confident they can convince the ECJ of their case but the hearing hinges on interpretation of European legislation brought in 1990 but not adopted by the UK until 1996. It gives some charitable activities, including admission charges, VAT exemption. Zoos, according to advisers, are ‘specifically mentioned’.
Customs has refused the exemption on the grounds that managers of London zoo are ‘paid’. The zoos claim trustees of the parent body receive no pay, making them a charitable body under the legislation and entitled to the exemption.