London Zoo in hunt for £10m

London Zoo could be in line for a huge cash windfall from the Government, which would help safeguard its future.

The Zoological Society of London has been in a six-year battle to recover up to £10m in VAT from Customs and Excise and is confident a hearing at the European Court of Justice later this month will lead to victory.

The case will set a precedent for eight other zoos in Britain, including Bristol Zoo, which could lead to up to £30m being reclaimed.

The society, which also runs Whipsnade Zoo, claims it should have been exempt from paying VAT on admissions since 1990 under European legislation which states there is an exemption for some activities such as cultural services.

The zoos are still paying VAT despite a 1996 British law that included zoos as cultural services. If successful, London Zoo would receive the equivalent of a year's income. This would be a boost for the attraction which 12 years ago nearly closed because of a drop in visitors.

"It would ensure we could generate more income and would help alleviate the financial pressure which is particularly acute this year because of foot and mouth," said Norman Reed, London Zoo's finance director.

Customs and Excise said London Zoo should not be exempt from charges because the zoo is not wholly run on a charitable basis.