UK opera house wins major tax victory

November 2006

Live Music Industry

Despite having a Government that professes to support the creative industries in the UK, the Treasury doesn’t seem to have read the script – and have been up to their necks in somewhat over zealous taxation activities. The Court of Appeal has now found that UK Customs & Revenue were completely wrong to strip the Gloucestershire based Longborough Festival Opera of its cultural purposes exemption – from VAT on ticket sales. Why were the Revenue so adamant that the Opera Company should be stripped of its exemption? Well – because it was because founding trustee, Martin Graham , unilaterally agreed to underwrite any losses from staging Wagner’s Ring Cycle in 2002 and 2003. This, according to the Revenue, meant that the Company was no longer run ‘voluntarily’ . To benefit from the exemption the orchestra needed to be managed and administered on a voluntary basis by persons who had no direct or indirect financial interest in its activities. The Revenue said that Mr Graham did have a financial interest – even though he was only prepared to cover losses – and didn’t want a share of any profits. The Court, thankfully, said that the Revenue were wrong. The Times 7th October 2006. 

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