The rules for the VAT refund scheme for museums and galleries is contained within Section 33A of the VAT Act 1994 and is drafted to seek to ensure that qualifying bodies providing free admission are not adversely affected.
The VAT refund scheme rules provide a way for eligible museums and galleries to claim refunds of the VAT incurred on goods and services purchased in order to provide free access. Ordinarily, it would not be possible to recover the VAT incurred on goods and services purchased to support non-business activities. However, under this scheme the government reimburses this otherwise irrecoverable VAT.
The museums and galleries are also entitled to offer other activities that in their own right are business activities, for example, catering, sales of books and gifts and exhibitions for which there is a charge.
A new statutory instrument (SI) adds 19 further museums and galleries that allow free public admission to the VAT refund scheme and removes those which are no longer eligible. It also updates the details of other bodies and their relevant museums and galleries where the name and address has changed since the last update. The new SI known as VAT (Refund of Tax to Museums and Galleries) (Amendment) Order 2024 is due to come into effect from 8 July 2024.
Get in touch with Jane Bull, our Director of Accounting, to discuss the VAT refund scheme.