Supplies on board ships, aircraft and trains: Intra-Community journeys: On-board consumption
We treat supplies of goods for on-board consumption as taking place outside the Member States and so outside the scope of VAT. This is due to the UK having exercised the option in Article 37(3) of the Principal VAT Directive (see VATPOSG4110) which permits Member States to relieve supplies of this kind from VAT.
When sold from an on-board bar or restaurant, all sales of food, drink and tobacco are treated as being for immediate consumption (although, as smoking is not permitted on board aircraft or trains, no sales of tobacco products qualify as being for consumption on board). Confectionery and soft drinks sold anywhere on board a ship, aircraft or train are treated as goods consumed on board and relieved of VAT; as long as it is self-evident that the products are of a type that are more suitable for on-board consumption than gift purchase or home use. Products that by virtue of their nature of packaging are clearly not suitable to be treated as consumed on board (such as boxes of chocolates or tins of biscuits) are subject to VAT in the normal way, even if these products are actually consumed on board the ship, aircraft or train.