The issue was whether customers of the appellant who attend weekly meetings and are given a handbook and other printed matter receive single standard-rated supplies of a weight-loss programme, as claimed by the commissioners, or separate supplies of zero-rated printed matter and standard-rated support services. The appellant offered to its customers services and products built on its approach to weight management. This approach was based on the key principles of healthy eating, moderate exercise and modifying behaviour. More than 6,000 meetings were held each week with as many as 350,000 people attending. The tribunal heard that customers attending their first meeting completed a registration form and paid a registration fee of £9 plus a meeting fee of £4.95. Thereafter, a weekly meeting fee was charged. New members received a handbook together with other items and, on an ongoing basis, they received a weekly leaflet and a monthly magazine.

The appellant submitted that the supplies delivered at meetings had two separate components: multiple supplies of standard-rated services and facilities; and zero-rated printed materials, neither component being ancillary to the other. In 2004, the commissioners conceded that there were mixed supplies with 80 per cent being zero-rated and, in the appellant's opinion, there was no reason why they should now take a different view.

The commissioners accepted that there was a series of transactions with a separate supply at each meeting but submitted that each supply was a single standard-rated supply. They maintained that a typical customer wanted to be able to use the leader's assistance and interact with other members. A common feature was the customers' desire to lose weight and their need for assistance in doing so. In the commissioners' view, the question was not whether the customers wanted the handbook and other printed materials separately, but whether it was artificial to split the supply into assistance and printed matter. The commissioners submitted that it was artificial and that the supply should be treated as wholly standard-rated.

The tribunal allowed the company's appeal.

1. As a matter of contract law and VAT law, there was a single transaction at the first meeting for a consideration comprising both the registration fee and the meeting fee. For this consideration, the member received a handbook and other items and was given an orientation talk in addition to supplies made at weekly meetings thereafter. The member also received a right to attend further meetings without paying another registration fee.
2. For meetings subsequent to the first meeting, there was a further transaction for a separate consideration. The member had already been given the handbook and, thus, only attended to obtain the services provided at the meeting and the further printed materials.
3. There were no indivisible supplies at the first or subsequent meetings. The services provided and the printed materials were each of use and were not so closely linked as to form objectively a single supply which it would be artificial to split.
4. There were mixed supplies of standard-rated services and zero-rated printed matter, although the zero-rated content of the supply at the first meeting was clearly greater.

No. 20,038