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HMRC internal manual

VAT Transport

Zero-rating of passenger transport: Perks, incidental services and ancillary supplies: ancillary supplies

The following supplies which are often provided in connection with passenger transport and are standard-rated.


Where catering is provided on passenger transport as an extra for which a charge is made additional to that for the transport, for example in a restaurant, buffet car or shop, it is standard rated. However, where supplied as an integral element of a supply of scheduled passenger transport and no extra charge is made whether or not the catering is used, catering is subsumed in the zero-rated supply of passenger transport. The Court of Appeal ruled in British Airways PLC, 1990 STC 643, that in-flight catering supplied during flights for no extra charge was not a separate supply of catering, but part of the supply of zero-rated transport. But, where it is clearly a feature of leisure transport to be enjoyed in its own right, for instance a round trip on a steam train where a meal is included in the ticket price, there are separate supplies of zero-rated passenger transport and standard-rated catering.

The cases defining our policy are:

  • Virgin Atlantic Airways Ltd (LON 94/1530A),
  • Alan Hughes and Judith Hughes t/a Pennine Boat Trips of Skipton (MAN 97/1027), and
  • Sea Containers Services Ltd (LON 98/140 and 2000 STC 82-90),

which are described in more detail in VTRANS021360.

Other supplies:

The following supplies which are often supplied in connection with passenger transport are standard-rated:

  • provision of facilities for:

    • car parking: see VTRANS030700 for airport car parking, and VTRANS021000 for car-parking supplied as an airline passenger perk.);
    • cycle storage;
    • left luggage; or
    • lost property;
  • the right to enter a platform (platform tickets); and

transportation of unaccompanied luggage, vehicles and trailers.