Some museums and galleries could be in line for VAT refunds, although they will have to make their claims by 31 March.
The opportunity relates to VAT underclaimed (input tax) before 1 May 1997, or overpaid (output tax) before 4 December 1996, when HM Revenue & Customs (HMRC) introduced a three-year cap for claims. It follows a case last year when publisher Condé Nast and motor trader Fleming successfully argued that the cap was brought in without warning and did not allow a reasonable transition period in which to make claims before the three-year limit came into force.
The ruling applies to input tax, meaning goods or services bought from a supplier, as well as output tax, which is tax paid on income.
The HMRC estimates that more than £1bn (excluding interest) is due to be repaid in relation to these claims.
"We are not suggesting everyone has a claim to make, but there is a window until 31 March for museums and galleries to revisit things and see if they are able to claim," said Justin Whitehouse, a VAT expert and partner at Deloitte which acted for Condé Nast.
Whitehouse said a claim could relate to mistakes that an organisation had made itself, such as not claiming for staff expenses, or to mistakes from changes in the law, such as the exemption applicable to cultural services.
Deloitte is talking to several museums and galleries about claims, but would not reveal which ones.
The opportunity relates to VAT underclaimed (input tax) before 1 May 1997, or overpaid (output tax) before 4 December 1996, when HM Revenue & Customs (HMRC) introduced a three-year cap for claims. It follows a case last year when publisher Condé Nast and motor trader Fleming successfully argued that the cap was brought in without warning and did not allow a reasonable transition period in which to make claims before the three-year limit came into force.
The ruling applies to input tax, meaning goods or services bought from a supplier, as well as output tax, which is tax paid on income.
The HMRC estimates that more than £1bn (excluding interest) is due to be repaid in relation to these claims.
"We are not suggesting everyone has a claim to make, but there is a window until 31 March for museums and galleries to revisit things and see if they are able to claim," said Justin Whitehouse, a VAT expert and partner at Deloitte which acted for Condé Nast.
Whitehouse said a claim could relate to mistakes that an organisation had made itself, such as not claiming for staff expenses, or to mistakes from changes in the law, such as the exemption applicable to cultural services.
Deloitte is talking to several museums and galleries about claims, but would not reveal which ones.
