The Value Added Tax (Cultural Services) Order 1996

Explanatory Note

(This note is not part of the Order)

This Order, with effect from 1st June 1996, introduces a new Group 13 into Schedule 9 to the Value Added Tax Act 1994 which exempts from value added tax admission charges to certain cultural activities. This implements Article 13A(1)(n) of EC Directive 77/388/EEC (OJ L145, 13.6.77, p.1) (“the Sixth VAT Directive”).

The exemption granted by item 1 of Group 13 applies to admission charges to cultural activities made by public bodies provided that exemption is not likely to put commercial enterprises at a competitive disadvantage. Note (3) implements the fourth indent of Article 13A(2)(a) of the Sixth VAT Directive, as permitted by the second sub-paragraph of paragraph 1 of Article 1 of EC Directive 89/465/EEC (OJ L226, 3.8.1989, p.21) (“the Eighteenth VAT Directive”). Note (1) to the Order defines a public body for the purposes of the Group.

Item 2 exempts admission charges to cultural activities made by certain other bodies (“eligible bodies”). Eligible bodies, by virtue of Note (2) to the Group, are bodies which cannot and do not distribute any profit they make, and use any profit made from admission charges to continue or improve the facilities to which admission is given. Such bodies must also be managed, or administered, by persons who have no financial interest in the bodies’ activities.

Note (4) to the Group limits the exemption to performances put on by public and eligible bodies, mentioned in item 1(b).

The Order also amends Group 12 of Schedule 9 to the Value Added Tax Act 1994 by extending the exemption for fund-raising to eligible bodies. This implements Article 13A(1)(o) of the Sixth VAT Directive insofar as that provision relates to exemptions under Article 13A(1)(n).

Copies of the document “Public Bodies” referred to in Note (1) to the new Group 13 may be obtained from HMSO Publications Centre, PO Box 276, London, SW8 5DT.