HC Deb 06 February 1984 vol 53 c435W
Mr. Faulds

asked the Chancellor of the Exchequer what is the policy of Her Majesty's Customs and Excise as to the circumstances in which value added tax is recoverable on agents' commissions in respect of purchases of works of art and museum objects by public museums and galleries, with particular reference to three distinct categories involved, namely, national institutions, local authority institutions and university institutions; and if he will make a statement.

Mr. Hayhoe

National and university museums and galleries can recover the VAT which they incur on agents' services relating to purchases of objects only if these services are supplied to them for the purpose of a business which they carry on. If the objects are to be displayed in a gallery or museum where an admission charge is made, this would be treated as a business and the VAT on agents' services would be recoverable. A local authority would be able to recover the VAT on agents' services supplied to it in connection with the purchase of objects even if the purchases were not made for business purposes, under the special provisions of section 20 of the VAT Act 1983. These provisions avoid VAT on non-business purchases falling as a burden on the rates.