The Roald Dahl Museum v HMRC

In The Roald Dahl Museum v HMRC (TC03445 – 25 March 2014) the museum successfully claimed that VAT on expenditure incurred in refurbishing and maintaining its exhibits was residual input tax as it had a direct and immediate link – for the purpose of the BLP test (C-4/94) – not only with the museum’s exempt supplies of admissions but also with taxable supplies made in the museum shop.

It was accepted that the whole of the VAT incurred on refurbishing and maintaining exhibits would be residual input tax if a direct and immediate link could be established with at least one taxable supply no matter how small (Mayflower [2006] EWCA Civ 116).

The tribunal found that items sold in the museum shop could be sold in any shop and that the exhibit costs were not a component of the supply of those items which was ‘freestanding’...