The issue was whether supplies by the appellant of cold food were zero-rated or were standard-rated as supplies of catering.

The appellant carried on business selling food to take away or to consume in areas that it controlled and in which seating was provided. The dispute concerned cold food such as sandwiches and fruit selected by customers from displays. On presentation of the food at a till, customers were asked whether the food was for consumption on the premises. If so, the food would be put on a tray. Otherwise, it would be put in a bag for the customer to take away. The members of the tribunal visited the appellant's outlets at Heathrow airport and at the Channel Tunnel terminal at Folkestone and noted that the areas designated for consumption were identifiable by the colour of the flooring. At Heathrow, the premises were ‘airside’ in the departure lounge and were occupied under an agreement with British Airports Authority (BAA). At Folkestone, there was a retail area with designated seating facilities in the ‘Food Court’ used by a number of food vendors. This area was in a facility which could only be accessed by car following entry to the Channel Tunnel complex.

The commissioners contended that the appellant was making a supply of catering. At Heathrow, there was a restriction on who could be airside and the customers also had the common purpose of travel. The arrangements between the appellant and BAA demonstrated the existence of a joint venture and, consequently, the premises were the whole of the departure lounge and airside areas. The commissioners contended that a similar situation applied at Folkestone, where the premises were the whole of the facility. Accordingly, argued the commissioners, the appellant's supplies were of food for consumption on the premises on which it was supplied and was, therefore, standard-rated catering in accordance with Note (3) to Grp. 1 of Sch. 8 to the Value Added Tax Act 1994.

The appellant submitted that it was not supplying catering, but goods in the form of food to either consume on the premises or to take away. It conceded that food put on a tray for consumption in its designated seating areas was standard-rated, but maintained that food sold to take away was zero-rated. The fact that customers had to show a pass or a travel ticket to get past the barrier to the appellant's premises did not turn the supply from one of goods to one of catering services. The customers had no common purpose, as stated by the commissioners, and any claim that the whole of the airside at Heathrow and the whole of the facility at Folkestone were part of the appellant's premises was absurd.

The tribunal allowed the company's appeal.

1. There was no joint venture or partnership between the appellant and either BAA at Heathrow or the landlord at Folkestone, and the retail units and seating areas were separate from the departure lounge and Food Court respectively.
2. The premises at both outlets were the retail units and the designated seating areas, and supplies for consumption outside these areas were not supplies of food for consumption on the premises on which it was supplied.
3. There was no common purpose to which the supply of food was linked. The customers had various reasons and purposes for being at the premises; travel was ancillary to those purposes. This was to be distinguished from a common purpose of attending a wedding or party to celebrate a marriage or some other event. The supply was to individuals to meet their need for sustenance; it was not part of some larger experience or enjoyment to be shared with others.
4. There was no supply of catering in relation to sandwiches and other cold food sold for consumption outside of the identified premises and the supply of such food was eligible for zero-rating under item 1 of Grp. 1 of Sch. 8 to the Value Added Tax Act 1994.

No. 19,755