Customs & Excise is facing an estimated bill approaching £50m after a European Court of Justice ruling found that UK zoos will not have to pay VAT on admission fees if their management decisions are made by non-paid trustees.
In a long-running spat between Customs and a consortium of nine zoos including London and Chester, the consortium has argued that admission fees for zoos should be standard rated if they can prove that their operating decisions are not made by paid executives.
The consortium, advised by VAT experts at Ernst & Young, believes they should not have been paying the VAT since 1990 when UK rulings were supposed to follow those of Europe. A decision on the test case was made last week.
Alan Sykes, financial controller of the North-East Zoological Society, which owns Chester Zoo, said he expects Customs to fight the decision. He added: ‘This judgement represents a victory for common sense and puts the ball into Custom’s court. They have been fighting this for so long, I would be surprised if they didn’t continue to fight what could be a £50m backdated bill.’
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