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HMRC internal manual

VAT Transport

Zero-rating of passenger transport: Cruises: Entertainment cruises

It is our policy that entertainment cruises (day trips, discos, party cruises etc) should normally be treated as multiple supplies. Accordingly, we have drawn up guidelines which have been agreed with the British Marine Industries Federation (including the Association of Pleasure Craft Operators) and the Upper Thames Passenger Boat Association to ensure consistency among operators. These are in VTRANS021350. In short, these explain what operators need to do to satisfy the multiple supply criteria where, for commercial reasons, they hold out the cruise at a single price.

Where it is not possible to achieve a multiple supply position most such cruises will be single standard rated supplies. The exception is where the cruise includes only minimal light refreshments, (such as a cup of tea and a biscuit) and these are incidental to a single zero rated supply of passenger transport. Cases where an operator claims that a cruise which includes more substantial catering and entertainment is a single zero rated supply should be reported to Supply Policy Team.