§ LORD STRABOLGIasked Her Majesty's Government:
Whether the Standing Commission on Museums and Galleries has expressed concern about the effect of value-added tax; and whether any national art museums or galleries have requested zero-rating for all works of art.
EARL JELLICOEMy Lords, the noble Lord, Lord Rosse, has written to my right honourable friend the Chancellor of the Exchequer, on behalf of the Standing Commission on Museums and Galleries, expressing the Commission's concern at the possible effect of value-added tax on museum activities. My right honourable friend has explained to them that museums which charge for admission will become taxable persons. As such they will be able to deduct any value-added tax paid on their purchases of goods and services (including value-added tax on works of art that they buy) from the tax on admission charges. In any accounting period for which the tax on their purchases is greater than that on their receipts Customs and Excise will under the normal working of the tax repay the difference.
He has also indicated that while museums which charge admission will be subject to value-added tax, this does not necessarily mean that the level of charges for national institutions already announced will go up when the tax is introduced.
The answer to the second part of the Question is, Yes.