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HMRC internal manual

VAT Cultural Services

‘Managed and administered on a voluntary basis by persons who have no direct or indirect financial interest in its activities’: Changing liabilities

It is conceivable that some bodies may seek to jump in and out of exemption by, for example, remunerating a trustee one year and not the next, or by allocating profits to the improvement and continuance of qualifying facilities one year and not the next under Note (2)(b) to Group 13.

We do not accept as a rule that the ‘eligible body’ status of a cultural body can change from year to year; and any attempt to argue so should be strongly resisted. In considering remuneration issues (and allocation of profits), the position of the body should be looked at over a period of several years. In principle, once a decision has been taken that a cultural body is either taxable or exempt, it will normally be expected to retain the same tax liability for several years (if not for the life of the body).