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HMRC internal manual

VAT Transport

HM Revenue & Customs
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Passenger transport connected with recreational activities or airport car parking: Introduction

Position from 1 April 95.

From 1 April 1995, the standard rate applies to supplies of services relating to entertainment or recreational activities and car parking at airports which include elements of passenger transport.

Such services are specifically excluded from zero-rating under Group 8, item 4 of by Legal Notes 4A, 4B and 4C to that Group, which were introduced by the VAT (Passenger Transport) Order 1994, SI 1994/3014.

The following supplies are wholly standard-rated:

  • the right of admission to theme parks, safari parks, piers and other places of entertainment, historic or cultural interest that incorporate passenger transport;
  • the right to use any vehicle to, from or within the above places, when supplied by the person supplying the right of admission, or the right to use the facilities, or someone connected with him. This includes rides such as those on monorails, cable cars and boats;
  • transport in any motor vehicle between a car park or its vicinity and an airport passenger terminal or its vicinity, when supplied with those car parking facilities; and
  • flights held out as being for entertainment or the experience of flying and not primarily to transport people from one place to another. Examples are hot air balloon rides, airship rides and Concorde “flights to nowhere”.

Position prior to 1 April 95.

The 1995 legal provisions were introduced in order to confine zero-rating under item 4 of Group 8 to the type of public transport which the Group had originally been intended to relieve when VAT began in 1973. Tribunals had increasingly been inclined to find that the item covered types of transport which were not of this kind, such as sight-seeing travel in a hot-air balloon (A. G. & K. A. Faulkner, MAN 91/329), or a trip within a tourist attraction (Quarry Tours Ltd, MAN 84/90). The new provisions were intended to stop the erosion of the relief. The fact that some types of transport of passengers were defined as standard-rated from 1 April 95 does not mean that all types of carriage of persons in vehicles were necessarily zero-rated beforehand as passenger transport: some were, some were not, depending on their individual nature. Fairground rides such as “big dippers” or miniature railways were never accepted by HMRC as constituting passenger transport, and have always been standard-rated.