Museums and galleries which offer free admission to the public may be eligible for refunds of VAT under the Museums and Galleries VAT Refund Scheme. Eligible bodies are listed Value Added Tax (Refund of Tax to Museums and Galleries) Order 2001. This list published as an annex to VAT Notice 998. This list has been updated.
HMRC has announced that the scheme has now reopened for eligible museums and galleries. The closing date for this round of applications has been extended to 5pm Wednesday 1 March 2023.
To be considered for inclusion in the scheme museums or galleries must:
- be open to the general public for at least 30 hours per week, without exception
- offer free entry, without prior appointment
- hold collections in a purpose-built building
- display details of free entry and opening hours on the museum or gallery website
Background
Museums and galleries offering free access are not regarded as being engaged in any business in relation to this activity. They may, of course, have 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.
Via the usual VAT rules, it is not possible to recover the VAT incurred on goods and services purchased to support non-business activities. Thus VAT incurred in connection with the free admission of the public is not normally recoverable.
However, the government will reimburse this otherwise irrecoverable VAT. For this to be the case, the provisions of section 33A of the VAT Act 1994 must apply, and the museum or gallery must be named in an order made by HM Treasury.
Examples of acceptable claims are for VAT incurred on:
- items and collections on display
- goods and services necessary for their upkeep
- upkeep of the part of the building in which they are housed
- provision of free information in relation to the items or collections on display, including advertising and other promotional material
Claiming
Application forms may be requested by emailing vat33a@dcms.gov.uk