Cultural exemption - certain services or all services
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22nd August 2014
The Upper Tier Tribunal has just released its decision in
the case of the British Film Institute (“BFI”). This decision is a
significant one for certain organisations that provide cultural
are presently obliged to charge VAT on admission prices/ticket prices
is also useful in further clarifying the scope for exemption applying
sporting services and indicates how future decisions which might turn
phrase “certain services” used in EC and UK legislation are likely to
The BFI is a not for profit organisation that has Royal
Charter requiring it to act in the public interest. It had lodged a
VAT of £1.2m in 2009 on ticket sales to films shown at its theatre and
festivals on the basis that it had accounted for VAT on supplies that
properly exempt as all
cultural services were exempted from VAT under the Sixth VAT Directive
77/388/EEC (‘Sixth VAT Directive’), art. 13(A)(1). The films screened
house’ rather than main stream mass entertainment films.
rejected the claim on the basis that UK law only specified certain
events and activities that benefitted from the VAT exemption. The
argument of HMRC was essentially based on the premise that the EC
conditional as it refers to “certain” cultural services rather than
cultural services. The case therefore turned on if “certain” is
“all” in the confines of the cultural VAT exemption.
Tier Tribunal (Tax) decided that there was no reason why film tickets
type sold by BFI should not be included within the cultural exemption.
law in the instance of the sporting exemption had found that the
“certain” sporting services applied to “all” sporting services provided
types of bodies referred to in the exemption. This decision was made on
the basis that the government had no scope to pick and choose the type
cultural activity what was or was not within the exemption. It also
point that the word cultural is not unclear, whereas HMRC tried to
it created an ambiguity.
Tier Tribunal has confirmed the decision of the First Tier and again
decision on existing EC case law particularly the cases of EC
Spain, Hoffmann and Canterbury
Hockey Club v R & C Commrs as these cases make it clear that a
member state has no discretion to choose the type of activity that is
the exemption and the type of activity that is outside.
organisation or your client is a non-profit making body providing
services (or sporting ones for that matter) and is accounting for VAT
income from such services it would be worth giving our free helpline a
see if there is any opportunity to make a back claim for VAT. It should
forgotten that any increase in VAT exempt income will have a knock on
VAT recovery on related costs, if this has not already been considered
firmly recommend that you call our helpline to discuss this point.
About the Author
VAT People are leading VAT and Customs Duty
consultants based in the
North West of England. We work with a wide range of businesses
throughout the UK as well as assisting our accountancy colleagues to
unravel the thorny VAT issues for their clients. We are one of the UK's
largest and most comprehensive sources of VAT and Customs advice, our
consultancy team having over 140
years of experience in VAT and Customs
gained in either HMRC or a Big 4 accountancy practice environment.
Call us on our VAT helpline 0800 077 4604 to discuss. All initial discussions are free with no-obligation.
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Article Published/Sorted/Amended on Scopulus 2014-09-04 08:54:33 in Tax Articles