Refurbishment VAT victory for gallery
4 Aug 08
Whitechapel Art Gallery, a charity, has succeeded in its appeal to the VAT Tribunal over the application of the Lennartz principle to the refurbishment of a building to be used for both business and non-business purposes
The gallery’s main activity is the free display of works of art, which is a non-business activity. It also makes taxable supplies from its shop and by hiring out parts of its premises and it planned to construct a brasserie in the additional gallery space from which taxable supplies would be made.
HMRC had ruled that the Lennartz principle could not be applied to allow initial full recovery of the VAT because the refurbishment works did not create a new asset. The tribunal rejected HMRC’s contention.