A Cotswold developer’s charitable opera organisation has won a £100,000 dispute with Revenue & Customs over VAT demands.
The High Court has allowed an appeal by Longborough Festival Opera, founded by property developer Martin Graham, after the Revenue revoked a charitable exemption from VAT on ticket sales and issued a £100,000 bill for backdated returns.
Graham, who built the opera house in his garden near Moreton-in-Marsh, Gloucestershire, to stage an annual summer season of productions, wrote to his fellow trustees stating that he would meet the charity’s losses from his private funds.
Backed by the VAT and Duties Tribunal, the Revenue interpreted the letter to mean that Graham held a financial interest in the organisation.
However, Lightman J rejected the Revenue’s arguments that the opera fell outside the scope of the cultural services exemption set out in the European VAT Directive.
“A director does not have an interest or financial interest merely because he gives the body a guarantee of an interest free loan,” he said.
All profits from the opera go to charities, including the Historic Churches Trust.
Longborough Festival Opera v Revenue & Customs Chancery Division (Lightman J) 13 January 2006.
References: EGi Legal News 27/01/06
