The VAT review for July 2019

Attribution of VAT on production costs

The case of Royal Opera House Covent Garden Foundation v HMRC [2019] UKFTT 329 concerned the Royal Opera House’s (ROH) input VAT recovery. The ROH sought to attribute the substantial input VAT on production costs to its taxable and non-core business activities as well as its exempt supplies of tickets. The FTT held that the costs should in part be attributable to taxable supplies such as catering made by the ROH. Tickets bought for the opera or ballet are exempt from VAT (VATA 1994 Sch 9 Group 13). However the ROH also made a number of taxable supplies (such as programme sales and production-specific commercial sponsorship arrangements) to which it argued its production costs had a direct...