A dispute over the British Museum’s tax liability was played out in Highbury Corner Magistrates’ Court yesterday (16 June).

Camden Council claims that the Bloomsbury Museum owes HM Revenue and Customs £720,000 in unpaid tax, a bill originally issued by the Valuation Office Agency. After the Council rejected an appeal for special treatment, the Museum decided to launch a legal challenge against the tax bill.

The British Museum argues that its entire site, including its two restaurants and gift shop, should benefit from relief against full business rates. According to a Museum spokeswoman, the reduced rate is justified by its status “as a charity which applies all of its funds for charitable purposes”. A five-year deal signed in 2012 between the Museum and catering firm Benugo, which provides food and drink for the Gallery Café and the Great Court Restaurant, is estimated to be worth around £40 million. Benugo also denies liability for the payment of business rates.

Cash-strapped’ Camden Council is fighting on. It believes the charitable relief should not apply to the Museum’s gift shop and restaurants. Theo Blackwell, Camden Town Hall finance chief Councillor, reiterated the “need to be careful about what is a charity and what is not.” He considered this especially important given the generous nature of the relief, which amounts to between 80-100% off an organisation’s tax bill. Confronted by these potential losses, the Council is required to set aside a large reserve each year to manage business rate appeals like that brought by the Museum.

Attracting 6.7 million visitors per year, the British Museum is one of the UK’s most popular cultural attractions for tourists. The outcome of its court challenge is pending.