Theatres will now be able to reclaim a proportion of VAT on the cost of
hosting a production, following a High Court judgment.
Mr Justice Hart ruled in favour of the Mayflower Theatre Trust, which had
argued that fees paid to production companies for the right to host productions
were not solely related to the VAT-exempt sale of a ticket, and that theatres
should therefore be able to recover a proportion of VAT on this expenditure.
Exemption for VAT on ticket income for performances staged at theatres was
introduced in 1996, and as a result, theatres were no longer able to claim back
VAT on related costs.
Deloitte indirect tax director Simon Baxter said theatres and cultural
organisations would be ‘delighted’ by the judgment.
‘The cost of hosting productions is one of the most significant items of
expenditure that any venue incurs, and relief from even a proportion of VAT is
The proportion of VAT that can be claimed is calculated from a ratio of
taxable income to total income, and is generally about 20-25%, but is ‘not fixed
and will be different for all theatres’, said Baxter.
It is not yet known whether HMRC has leave to appeal.
The drive towards a fully digital tax regime is an admirable one, but mandation is simply wrong, according to one of the UK's most senior tax technology practitioners - Paul Aplin
HMRC has won its tenth successive case against tax avoidance schemes promoted by NT Advisors. The Court of Appeal has ruled that NT ... read more
HMRC is continuing to ramp up the number of raids on premises it carries out as part of criminal investigations, searching 761 properties in the last year
Five million taxpayers are ow using digital personal tax accounts (PTA) as part of the making tax digital strategy, HMRC said