Orchestra loses battle over VAT

The Bournemouth Symphony Orchestra was founded in 1893

Bournemouth Symphony Orchestra has failed in its court battle to be exempt from charging VAT on ticket sales.

The Court of Appeal agreed with last year's High Court decision that having a paid executive on the board meant the BSO was not "essentially voluntary".

This is one of the requirements imposed by the Revenue for the orchestra's admission income to be treated as VAT-exempt.

The BSO said it was "very disappointed" and would consider an appeal.

In 2002, The European Court ruled that London Zoo's ticket money could be treated as free of VAT.

The decision overruled the UK one and allowed many charities to reclaim VAT backdated to June 1993 - three years before the EU legislation was implemented in the UK.

It [BSO] was given very strong indications that it would win the appeal. Simon Millward

But in December 2003, customs issued a policy stating that as long as one person is paid for managerial or administrative work, or has a financial interest in the company, is either an actual board member or in possession of delegated power, the exemption could not apply.

Last year, Mr Justice Mann ruled in the High Court that because managing director Michael Henson was paid for his work on the board of the BSO, it meant it was not "essentially voluntary".

Simon Millward, spokesman for the BSO, told BBC News: "The orchestra is very disappointed with the ruling. It was given very strong indications that it would win the appeal.

"They are waiting for the full ruling to be published before they can consider what action to take.

"They will be taking advice from the legal team before deciding whether to take it to the House of Lords or the European Court."

The BSO was founded in 1893 and gives about 130 concerts a year at venues across the UK and abroad.