TaxCorporate TaxChester Zoo wins £1.3m VAT case

Chester Zoo wins £1.3m VAT case

North England Zoological Society can offset VAT against animal upkeep, first-tier tribunal rules

THE UK’S LARGEST ZOO is set to reclaim £1.3m from HM Revenue & Customs after it won a VAT dispute at the first-tier tax tribunal.

It was ruled Chester Zoo – owned and run by the North of England Zoological Society charity (NEZS) – could reclaim the payments, which stemmed from caring for its 12,000 animals.

HMRC claimed it was owed the sum as NEZS had reclaimed too much between 2003 and 2012.

NESZ said it should offset the cost of maintaining its animals against the VAT gleaned from its gift shops and cafés.

In summing up, Judge Jonathan Cannan noted the animals are “the main event” for visitors, the zoo would “often make a loss” without the income generated through its retail and catering activities, and as such are vital to its function.

“Standing back to look at the overall picture, it seems to us that in the particular circumstances of the society’s economic activities the animal-related costs have a direct and immediate link to the catering and retail supplies. We are satisfied that economically the animal-related costs are a cost component of the catering and retail supplies,” he said.

HMRC has an opportunity to appeal within 28 days.

The zoo was opened in 1931 and attracts 1.4 million visitors annually.

It is not the first time that zoos have clashed with the taxman. At the turn of the century there was a spat over whether zoos should pay VAT on admission fees.

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