A Cotswold developer’s charitable opera house has taken Customs & Revenue to court in a £100,000 dispute over VAT demands.
Longborough Festival Opera, founded by property developer Martin Graham, claims that it was issued with a £100,000 bill for backdated returns over three seasons after the Revenue revoked a charitable exemption from VAT on ticket sales.
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 has interpreted the letter to mean that Graham has a financial interest in the organisation.
Its lawyers claim that the opera is therefore outside the scope of the cultural services exemption of the European VAT Directive and must therefore pay VAT on its ticket sales.
Profits from the opera go to charities including the Historic Churches Trust.
Longborough Festival Opera v Commissioners of Revenue & Customs Chancery Division (Lightman J) 13 January 2006.
References: EGi Legal News 13/01/06
