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By Ben Mattison
22 Jul 2005
A British judge has ruled that the Bournemouth Symphony must pay the U.K.'s value-added tax (VAT), the London Telegraph reports.
The orchestra had claimed that as a nonprofit group its ticket sales should be exempt from the tax. But the judge found that because managing director Michael Henson, a paid employee, is a member of the BSO's board, the board is not "essentially voluntary" and the orchestra is not eligible for an exemption.
The ruling could have a broad impact on British nonprofits, according to the Telegraph. Three years ago in a similar case, a European court ruled that tickets to the London Zoo were VAT-exempt. But since that ruling, British tax authorities issued a rule preventing groups with paid board members from claiming exemption.
Simon Baxter, an accountant advising the BSO, said that the rule was intended to exclude groups in which board members had a financial interest in sales. But that was not the case at the BSO, he said, because Henson is paid a flat salary.
The orchestra plans to appeal, according to the Telegraph.
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