VAT liability of admission fees to live event screenings

The taxpayer was a registered charity that provided artistic theatrical and cultural experiences to the Derby community. It was therefore an ‘eligible body’ for the purposes of the VAT exemption for certain cultural services. The legislation in VATA 1994 Sch 9 Group 13 item 2 provides exemption for the ‘supply by an eligible body of a right of admission to … a theatrical musical or chorographical performance of a cultural nature’.

The dispute concerned live event broadcasts and the admission fee paid by the audience. For example the charity paid a fee to the Royal Shakespeare Company to be able to show a live performance of The Tempest on a screen at its premises and charged an admission fee to those who wanted to see the performance.

HMRC accepted that the charity was an eligible body that the performances were cultural in nature and that...