Campaigners had been lobbying for a halt to plans to charge £250,000 worth of VAT on the construction of the memorial, which will take the form of ceremonial gates.
Customs & Excise had insisted the tax be paid but Treasury ministers have let it be known today, just a week before the Queen Mother is due to officially open the memorial, that there will be no VAT to pay.
On the continent all war memorials are VAT free but the sticking point in the UK came because the gates were being payed for privately and not by the state.
Baroness Shreela Flather, chairman of the trust that organised the building of the gates, said: ‘You cannot say to people give us money we have to pay the VAT.’
Organisers had argued for an extra statutory dispensation but were told it would not work.
According to arcane Customs rules it appears the memorial would have avoided VAT if it could be classed as a building but because it had no roof, VAT still applied.
The breakthrough seems to have come after Treasury officials decided four pillars in the structure contained enough space to be classified as a building with a roof, thus winning exemption from the tax.
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