The Independent of London reports that the ruling issued by the Court of Appeal yesterday will cost the orchestra up to Ô£50,000 a year. The judges upheld a decision made in the High Court last year that disqualified the Bournemouth Symphony from the VAT exemption granted to voluntary organizations.
The orchestra — whose music director is Marin Alsop — reportedly thought it might qualify for VAT exemptions because it is a cultural not-for-profit organization, but the High Court ruled that the orchestra was not "essentially voluntary," as required, because Michael Henson, the BSO's managing director and a board member, receives a salary, according to The Independent. The paper says the orchestra may appeal the decision.
A relevant 2002 ruling from the European Court stated that the London Zoo's ticket sales should be exempt from VAT. But in 2003, a UK government policy was declared stipulating that organizations would be ineligible for such an exemption if a salaried staff member also sat on the board of directors.
The Gloucestershire-based Longborough Festival Opera, however, received a favorable ruling yesterday after a similar appeal for VAT exemption on ticket sales.
The Times of London reports that Appeal Court judges overturned an earlier ruling that disqualified the company from having a "cultural purposes exemption." Martin Graham, LFO's founding trustee, was accused of having a financial interest in the company following his offer to underwrite losses resulting from a production of Wagner's Ring cycle.
The Times quoted Graham as saying, "This decision has huge implications for all arts charities nationally, right the way up to big organizations like the Royal Opera House and Glyndebourne."
Members of the company (which specializes in Wagner) reportedly celebrated outside the courthouse, dressed as Valkyries and carrying the fake corpse of a VAT man. The Bournemouth Symphony Orchestra, meanwhile, presumably feels like burning that VAT man at the stake.