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VAT: Museums and Galleries

Volume 488: debated on Wednesday 25 February 2009

To ask the Chancellor of the Exchequer what recent discussions he has had with HM Revenue and Customs officials on changes to the interpretation of the rules on the recovery of value added tax for libraries and museums; and if he will make a statement. (257349)

There have been no discussions about changing the interpretation of the rules governing the scheme that provides for the recovery of VAT by libraries and museums under the provisions of section 33A of the VAT Act 1994.

The scheme was introduced as a part of the Government's commitment to make access to the main museums and galleries free. Because VAT can be recovered only on purchases relating to taxable business activities (such as charging for admission), abolishing admission charges could have left museums and galleries bearing the cost of irrecoverable VAT. The scheme refunds this VAT, but it is confined to museums and galleries. The National Libraries are included in it, but only in relation to their permanent collections on free public display.