- HMRC is actively reviewing the VAT treatment of filming rights
- Local authorities are being contacted by HMRC regarding the fees for filming rights
- HMRC believes that when filming occurs in public spaces, the council is using the property differently from its intended public use, thus subjecting the entire supply to standard VAT rates
- This approach is also applied to typically non-business areas like highways when closed for filming
- HMRC combines exempt and non-business supplies into a single taxable supply when filming is involved
- Key arguments from HMRC include
- Councils do not grant exclusivity over sites used for filming
- Film companies use sites more for their facilities than for occupying the land
- When land is let with significant facilities, it is not merely a passive occupation
- Legal and VAT case law supports that exclusivity for VAT exemption can still apply even if others have access rights
- HMRC’s stance on the second argument is considered incorrect as it would imply any scenic land could not be VAT-exempt
- The validity of the third argument depends on individual assessments
- HMRC agreed to delay collecting repayments until after the CIPFA VAT Committee meeting in November 2024
- Post-meeting, HMRC maintained its position on standard rating filming rights
- The issue will be further discussed by the CIPFA VAT Committee with the policy group and taken to the Land and Property Liaison Group
- Councils are advised to assess each filming rights request individually rather than applying a general rule, as many could be non-business or exempt from VAT
Source: pstax.co.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
