Roaring success

Chester Zoo which is operated by the North of England Zoological Society received income from admission fees catering and merchandise sales and special events and promotions linked to the animals.

A dispute arose about the extent to which the society could recover input tax. It argued that the standard method of input tax recovery was appropriate because the animal-related costs were a cost component of taxable supplies including catering and retail supplies as well as the exempt admission income.

HMRC said the animal-related costs were a cost component of the admission charges but only some of the taxable supplies. They did not relate to supplies of catering and merchandise. As a result the standard method did not give a fair and reasonable apportionment and the standard method override should apply.

The taxpayer appealed.

The First-tier Tribunal noted the fact that many of...