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Glasgow
+44 (0)141 221 2984

Edinburgh
+44 (0)131 225 6366

Stirling
+44 (0)1786 451745

Dumbarton
+44 (0)1389 765238

Hamilton
+44 (0)1698 459444

French Duncan

VAT refunds for museums and galleries - Government sets tight deadlines for new applications

20 June 2016

In the 2016 Budget, the Government announced that the VAT refund scheme, currently available to national and university museums, will be broadened to include any museum that meets the basic eligibility criteria for entry to the scheme.

One of the main criteria is that the museum must allow free access to the public. The full list of conditions can be found within HMRC’s Notice 998 but the main criteria are as follows:

To be eligible to apply for admission to the scheme museums or galleries must:

• Be open to the general public for at least 30 hours per week, without exception

• Offer free entry, without prior appointment

• Hold collections in a purpose-built building

• Display details of free entry and opening hours on the museum website

At the moment, many museums that currently allow free access to view their collections cannot recover VAT incurred on expenditure associated with maintaining their collections.

Admission to the VAT refund scheme, however, will allow qualifying museums or galleries to recover the VAT incurred on expenditure associated with allowing free admission to view their principal collections. Museums and galleries that meet the eligibility criteria can apply to HM Treasury to join the scheme immediately.

HMRC has published an updated version of its guidance on the VAT refund scheme to confirm its interpretation of these changes.  Whilst the deadline for the first round of applications to join the scheme has now passed, HMRC has stated that a further round of applications will follow immediately after the June 2016 deadline, with a closing date in June 2017.  Interested applicants should consider making an application for this deadline as early as possible.

If you would like to explore this opportunity, or need assistance with any applications to join the VAT refund scheme, please contact French Duncan’s VAT Senior Manager Maria McConnell on  0141 221 2984 or email m.mcconnell@frenchduncan.co.uk