An Upper Tribunal has ruled in favour of HMRC and rejected the argument from the Royal Opera House Covent Garden Foundation, to deduct VAT totalling £532,069 paid by it on supplies comprising production costs between 1 June 2011 and 31 August 2012.

The Royal Opera House has filed several appeals challenging HMRC's override of its VAT deductions claiming that HMRC had ‘acted unfairly and unreasonably in disallowing the recovery of input VAT’ with the Royal Opera House arguing that there was a direct link between the foundation's taxable revenue streams and its tax-exempt production costs.

In May 2019, the First Tier Tribunal agreed that the supplies did create such a link and that some input VAT incurred on the production costs was recoverable, HMRC appealed to the Upper Tribunal in April 2020.