Ingliston Driving Experiences Ltd v The Commissioners for HMRC [2025] UKFTT 564 (TC)

[2025] UKFTT 00564 (TC)Case No TC09528
FIRST-TIER TRIBUNAL
TAX CHAMBER
Venue Birmingham Employment TribunalHearing Heard on: 22 and 23 April 2025Date Judgment date: 22 May 2025
Appeal reference: TC/2021/16528
VAT – temporary reduced rate for hospitality and tourism introduced during the coronavirus pandemic – supercar driving experiences – whether a supply of a right of admission – yes – whether a fair, amusement park or similar cultural event and facility – yes – CJEU judgment in Erotic Center applied – Tribunal decision in Young Driver considered – appeal allowed
Before
TRIBUNAL JUDGE RACHEL GAUKESHAMEEM AKHTAR
Between
INGLISTON DRIVING EXPERIENCES LTDAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentThe Appellant was represented by its director, Adam Hayes for AppellantHarry Winter of counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs for RespondentsDECISION

Introduction

[1]The Appellant, Ingliston Driving Experiences Ltd (“Ingliston”), appeals against an assessment to VAT of £31,794.30, and a denial of credit for input VAT of £15,200.67. Both relate to the VAT period 10/20 (the period from 1 August 2020 to 31 October 2020). The VAT assessment and the denial of input VAT both result from HMRC’s decision, expressed in a review conclusion letter dated 11 November 2021, to treat Ingliston’s supplies as standard rated for VAT purposes, rather than benefiting from reduced rating.[2]Having heard the submissions and reviewed the evidence of both parties we have decided, for the reasons set out in this decision, that the disputed supplies did qualify for reduced rating. The appeal is therefore allowed.

Hearing and evidence

[3]We had a 202-page hearing bundle, plus an appellant’s supplementary bundle containing additional pages numbered 203-210 inclusive. “Pages” 208 and 209 were two promotional videos, which we were able to download and watch before the hearing. One of these videos was produced by Ingliston, the other by a business called Young Driver Training, which was the subject of an earlier decision by this Tribunal and which we discuss further below.[4]The hearing bundle included HMRC’s statement of case, correspondence between the parties and the Tribunal, the disputed VAT return, and other relevant documents and correspondence. The appellant’s supplementary bundle included a revised witness statement from Mr Hayes dated 27 March 2025, and other documents including print-outs from Ingliston’s website and computer system.[5]We also had a 463-page authorities bundle, a 5-page supplementary authorities bundle, both parties’ skeleton arguments, and a 29-page supplementary hearing bundle (in addition to the appellant’s supplementary bundle) containing further extracts from Ingliston’s website and other documents.[6]Mr Hayes (Ingliston’s director) represented Ingliston and gave evidence. His revised witness statement stood as his evidence-in-chief and he answered questions put to him in cross-examination by Mr Winter. We found his witness evidence to be straightforward, credible and reliable.

Findings of fact

[7]Based on the evidence before us, we make the following findings of fact.(1) Ingliston was formed in October 2019, and Mr Hayes is its director. Its business is providing members of the public with the opportunity to drive a range of “supercars” at off-road venues. It provides its services by holding “event days”, at a frequency of approximately five to six per month.(2) Ingliston sells vouchers to customers on its website, and directly on event days. These “own sales” account for around 80-90% of Ingliston’s business, with the remainder of voucher sales being made on third party websites. The vouchers are redeemed on Ingliston’s website, at which point the customer chooses a venue, a vehicle, and any add-ons such as a ride in a four-seater. Customers can also choose to buy insurance at this point. A customer who has redeemed their voucher then receives a ticket.(3) A significant proportion of Ingliston’s sales are made on event days, either to pre-booked customers who choose to buy additional driving experiences, or to people who may have intended only to watch a friend or family member but who decide on the day to participate themselves.(4) Ingliston owns a total of 18 cars which it moves between three different venues, two in Scotland and one in Northern Ireland, operating from only one of these venues at a time. The venues are a rally and go-kart track, a former race circuit, and a current race circuit. The circuits do not resemble public highways in that they are one way and have fewer visual markers, for instance they do not have kerbs, lamp posts or traffic lights.(5) Of Ingliston’s 18 cars, 16 are two-seaters and two are four-seaters. The four-seaters are BMW M3s (the “M3s”). While an event day is in progress, the number of cars that will be driving at the same time varies: on occasion all 18 might be driving at once, but the average is around 12 at any one time.(6) Customers can choose either to drive themselves, or to be driven. They are always accompanied by a member of staff who is a professional driver. These individuals are referred to as instructors. The instructor will either be driving, in which case the customer is the passenger (or one of the passengers), or will accompany a customer who has chosen to drive themselves.(7) The proportion of customers who choose to drive themselves (rather than be driven as passengers) is between two thirds and 60%. Customers who are driven by a professional driver may take part in a simulated race.(8) Rides in the M3s are sold as a separate product, and are provided to up to three passengers, who are driven by a professional driver. In the great majority of cases there will in fact be three passengers in an M3, rather than just one or two. Rides in the M3s may be purchased in advance but most are bought on the day, as an “extra” in addition to the cars that have been pre-booked.(9) We were given some figures for Ingliston’s sales on a typical day. On that day, around 200 people had pre-booked tickets. In terms of tickets sold, two-seaters accounted for around 80% of the sales, with the remaining 20% being for the M3s. In terms of numbers of customers, the proportion having rides in the M3s was significantly greater than 20%, as the M3s carry up to three passengers at a time.(10) Customers have a large age range: the normal minimum age is 12, but younger children can be accommodated in the M3s if their accompanying adult can provide a car seat. There is no upper age limit; we were given an example of a customer who was 92 years old.(11) Paying customers in possession of a ticket are granted access to a fenced and gated pitlane area, from where they can access their car. Friends and family of the paying customer are not admitted to the pitlane area but can watch from behind the fence. This is even the case if the customer is a child being driven in a two-seater car: their accompanying adult(s) must stay behind the fence, and the driver will escort them across the pitlane into the car. The pitlane is about five metres wide and customers will typically only take a few seconds to walk from a gate in the fence, across the pitlane and into a car.(12) The area behind the fence is referred to as the paddock. Anyone can access the paddock, no ticket is needed. There are catering supplies in the paddock, and these are available to the general public.(13) If the customer is driving themselves, the instructor’s presence in the car is both to ensure safety, and to enable the customer to have an enjoyable experience. The instructors give advice on driving technique, and guidance on braking, cornering etc. Ingliston’s website FAQs state that the instructors “hold accredited licences such as ARDS and MSA”: we did not have further evidence about these licences.(14) All customers receive a safety briefing before their drive.(15) Customers need to have a driving licence if they are over 17 and wish to drive themselves, but not if they choose to be a passenger. Ingliston also provides driving experiences for children in a separate safe environment, and the children of course do not have driving licences.(16) The first two paragraphs of the terms and conditions on Ingliston’s website are as follows: “Ingliston Driving Experiences Limited (IDE), and [sic] has over 40 years’ cumulative experience in Supercar Driving Events and is delighted to offer you driving experiences of the highest quality. We are here to help you have a fun, safe, exciting and memorable time with us in pleasant surroundings. Our Customer Service Team has years of experience and we only use the highest quality Instructors and Supercars in the Industry. Our Venues have been handpicked for their Circuit layouts and geographical locations ensuring you will have a Thrilling Drive with us.”(17) As a result of the covid pandemic, lockdown restrictions were brought into force in the UK from late March 2020, and Ingliston was forced to cease operating. At the relevant times, Ingliston mainly operated in Scotland, and here the lockdown was lifted in September 2020 for a short period, during which Ingliston operated two event days. The lockdown was then reimposed and not lifted until July 2021. Ingliston continued to make some sales through its website over this period, despite the lockdown.(18) In July 2020, the Government introduced a temporary reduced rate of VAT, at 5%, for certain supplies of hospitality, holiday accommodation and admissions to certain attractions. On the advice of its accountant, Ingliston applied the 5% rate of VAT to its supplies from 15 July 2020.(19) On 12 May 2021, HMRC issued a VAT assessment to Ingliston for period 10/20. The assessment was raised under VATA 1994, s 73(1) on the basis that Ingliston’s supplies should have been standard rated rather than at a reduced rate. There were also some corrections of inaccuracies in Ingliston’s input tax calculations (Ingliston has not challenged these corrections on appeal).(20) HMRC offered a statutory review of their decision. The offer was accepted and the review was completed on 11 November 2021, with the reviewing officer upholding the original decision that Ingliston’s supplies did not qualify for the reduced rate of VAT.(21) Ingliston appealed to the Tribunal on 9 December 2021.

Relevant law

[8]The supplies that are relevant to this appeal all took place before 31 December 2020, which was “IP completion day” (the final day of the implementation period for the UK’s withdrawal from the EU).[9]This means that EU law applies to this appeal, and we are bound by the case law of the Court of Justice of the European Union (“CJEU”) as regards CJEU decisions made before 31 December 2020. We are not bound by CJEU decisions made after that date, but we may have regard to them. This is the effect of sections 1A and 6 of the European Union (Withdrawal) Act 2018 as they applied at the relevant time. We note that the amendments that were made to section 6 by the Retained EU Law (Revocation and Reform) Act 2023 do not apply as regards any time at or before the end of 2023.[10]The VAT Directive (Council Directive 2006/112/EC) gives EU Member States the right to apply reduced rates of VAT to certain goods and services. The goods and services to which Member States may apply reduced rates are set out in Annex III to the VAT Directive. This includes, at Item 7:
“(7) admission to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and facilities;”
[11]The CJEU considered the reduced rates of VAT in Erotic Center BVBA v Belgium Case C-3/09 [2010] STC 1018 (“Erotic Center”). That case concerned a business which provided cubicles in which people could watch films on a television screen. There was room for only one person in a cubicle at any one time. The court had to decide whether these supplies fell within the wording set out as Item 7 above, and so qualified for a reduced rate of VAT.[12]At [15], the CJEU explained that, because the reduced rates of VAT are an exception to the principle that the standard rate applies, provisions enacting reduced rates must be interpreted strictly. At [14] and [16], the court stated that the concept of admissions to a cinema must be interpreted “in the light of its context” within the VAT Directive, and “in accordance with the usual meaning of those words”.[13]At [17], the CJEU stated that the various events and facilities listed in what is now Item 7:
“have in particular the common feature that they are available to the public on prior payment of an admission fee giving all those who pay it the right collectively to enjoy the cultural and entertainment services characteristic of those events and facilities.”
[14]The court concluded that the concept of admissions to a cinema did not cover a payment by customers to watch films on their own in private cubicles.[15]On the question of a requirement to interpret provisions strictly, Advocate General Jacobs observed in his opinion in HMRC v Zoological Society of London Case C-267/00 [2002] STC 561 at [19] that this is not the same as a narrow or restrictive interpretation. In the context of exemptions from VAT (which must also be interpreted strictly) he opined:
“[19]…Both the exemptions and any limitations on them must be interpreted in such a way that the exemption applies to that to which it was intended to apply and no more.”
[16]Phantasialand v Finanzamt Brühl Case C-406/20 (“Phantasialand”) is a CJEU decision that was released after 31 December 2020, and so is not binding on us, but we may have regard to it. In its judgment, the CJEU gave guidance on the meaning of fairs and amusement parks for the purposes of Item 7:
“[29] Therefore, first, those concepts must be interpreted in accordance with their usual meaning in everyday language and, secondly, they must be interpreted strictly given that the possibility to apply a reduced rate of VAT constitutes a derogation from the principle of the application of a standard rate […] [30] With regard to the usual meaning in everyday language of the expressions ‘amusement park’ and ‘fair’, as the Commission, in essence, noted in its written observations, the expression ‘amusement park’ denotes a landscaped site containing various facilities for recreation and amusement, whereas a ‘fair’, although, in general, also possessing the same facilities, is characterised by the fact that it takes place, albeit with a certain regularity, for a temporary period.”
[17]In the UK’s domestic VAT legislation, section 29A(1) of the Value Added Tax Act 1994 (“VATA 1994”) provides that a reduced rate of VAT at 5% shall apply to supplies that are specified in Schedule 7A. The Treasury is empowered to add, delete and/or vary by order any supplies in Schedule 7A.[18]Schedule 7A was varied by article 4 of the VAT (Reduced Rate) (Hospitality and Tourism) (Coronavirus) Order 2020 to add a new Group 16, entitled “Shows and Certain Other Attractions”, which provided as follows:
“Item No. 1. Supplies of a right of admission to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and facilities but excluding any supplies that are exempt supplies by virtue of Items 1 or 2 in Group 13 of Schedule 9.”
[19]Items 1 and 2 in Group 13 of Schedule 9 are not relevant to this appeal.[20]Group 16 was in force in the UK from 15 July 2020 until 31 March 2022. It was therefore in effect for the VAT period that is relevant for this appeal.[21]The wording of Group 16 is (apart from the final wording about Items 1 or 2 in Group 13 of Schedule 9) effectively identical to Item 7. The UK was not obliged to implement Item 7, because Member States are given an option as to whether to introduce reduced rates. It is, however, clear that by introducing Group 16, the UK was implementing Item 7. This means that, in accordance with the Marleasing principle, we must interpret Group 16, so far as possible, in the light of the wording and purpose of the VAT Directive to achieve the result pursued by that Directive (see HMRC v IDT Card Services Ireland Ltd [2006] STC 1252 at [79], Re Olympus UK Ltd [2014] Bus LR 816 at [45] and VW v Secretary of State for Work and Pensions (PC) [2014] UKUT 573 (AAC) at [24]).[22]In Twycross Zoo v HMRC [2007] V&DR 425 (“Twycross Zoo”), the VAT Tribunal considered whether “animal encounters” offered by a zoo constituted an exempt supply of a right of admission to a zoo. An animal encounter involved a member of the public, who would already have paid an admission fee to the zoo, making an additional payment to experience a closer contact with certain animals. The Tribunal decided that the animal encounters fell outside the scope of the exemption. At [22] the Tribunal said:
“Having defined the nature of the animal encounter, the second question is how should the “right of admission” be construed. I accept Ms Whipple’s contention that one looks to the plain and ordinary meaning of the wording. Member States were given a wide mandate and the UK Government exempted the right of admission, nothing more and nothing less. In my view, what is exempted is the physical admission to the Zoo. The notion of admission cannot in its ordinary meaning be extended to encompass all the cultural services offered by the zoo.”

Young Driver

[23]HMRC, in their submissions, drew particular attention to the previous decision of this Tribunal in The Young Driver Training Ltd v HMRC [2023] UKFTT 271 (TC) (“Young Driver”).[24]In that case, the appellant business provided driving experiences for 4 to 17 year olds at a number of peripatetic venues within the UK, including various car parks and show grounds. The majority of experiences were pre-booked and almost half were bought as presents as a “one-off” treat for a child. The experiences took place within an area that was fenced off for safety, with only the child and the persons accompanying the child being granted access.[25]Experiences for 4 to 10 year olds took place in specially built two-seater miniature electric cars, on a special course that replicated a realistic road system. Participants received a five-minute briefing/demonstration before taking part in the experience. The child was unaccompanied during the experience, but supervised by the appellant business. These experiences (for 4 to 10 year olds) were available at nine of the appellant’s 75 venues.[26]Experiences for 10 to 17 year olds mostly took place in conventional cars fitted with dual controls, identical to those used for driving lessons on the public highway, though some took place in classic cars, a fire engine or a Bentley Continental. The 10 to 17 year old would always be accompanied by a qualified adult driving instructor.[27]The appellant’s website described its experiences as “driving lessons” and the appellant as a “driving school”. The website referred to encouraging “teens to become safer drivers, giving them a head start when it comes to learning to drive… On their very first lesson, teens will be starting the car, moving off, changing gears and steering…All lessons are geared towards the child, so if they've already done a Young Driver lesson, they'll move on to more advanced skills such as junctions, turning, parking and driving in two-way traffic.”[28]Available experiences included a “mock practical driving test” and “driving lesson bundles” (comprised of six “driving lessons”).[29]The Tribunal found that the appellant was not supplying a “right of admission”, stating at [48]:
“We accept that the Appellant's supply includes admission to the fenced off area where the particular Experience takes place; however, it is our view that the supply comprises considerably more than a “right of admission” when one looks to the plain and ordinary meaning of the wording. The supply (the Experience) includes not only a “right of admission” to the fenced off area but also the use of a vehicle, driving tuition and supervision. What is being supplied is a package of benefits over and above a right of admission to the fenced off area. Without the use of a vehicle, driving tuition and supervision there would be no driving Experience.”
[30]At [50], the Tribunal said:
“…We accept that the Appellant has designed the Experiences to be enjoyable and a “fun” driving experience for under 17 year olds but the “fun” objective of driving a vehicle can only be achieved if the tuition and supervision are supplied, especially when the vehicle has a manual gearbox and clutch. The accepted evidence before the Tribunal was that nothing that the child was taught during the Experience was detrimental to good driving practice or would hinder the child's progress when having driving lessons on the public highway. If that were not the case then there would be no point in the Appellant offering a block of driving lessons and a mock driving test. Whilst what is supplied by the Appellant is not a driving lesson with the objective of passing the driving practical test, the main supply is plainly a supply of driving tuition over and beyond the physical admission to the fenced off area.”
[31]The Tribunal further held that even if they were wrong that the supply was not a right of admission, the appellant’s supplies were not the type of attraction described in Group 16. The Tribunal rejected a submission by the appellant that the supplies were similar to a circus or fair, observing in [55] that both a circus and a fair offer a range of attractions and amusements, and a customer who has purchased an entrance ticket is able to freely wander around to view all the available attractions. This could be contrasted with the appellant’s business, where there were no other available amenities or attractions within the fenced off area to view or enjoy.[32]At [56], the Tribunal also rejected a submission that the appellant’s driving experiences were comparable to a dodgem car ride, as with dodgem cars bad driving is embraced as part of the enjoyment, whereas the driving experiences involved a child being instructed and supervised on a one-to-one basis to drive in a safe and controlled manner.[33]Having rejected some further submissions by the appellant concerning the EU principle of fiscal neutrality, the Tribunal went on to dismiss the appeal in the Young Driver case.

Discussion

[34]Ingliston has not raised any procedural or arithmetical challenges in this case. The sole issue in dispute is whether the supplies qualified for the reduced rate of VAT.[35]At the outset of the hearing, Mr Winter queried whether a small portion of Ingliston’s supplies might be subject to a different VAT treatment from the main supplies of driving experiences. If so, HMRC were willing to give Ingliston the opportunity to quantify these supplies: on the basis, we inferred, that if we were to dismiss the main appeal, this might improve Ingliston’s VAT position in relation to these separate supplies.[36]Mr Hayes told us that he was happy to “bundle up” the supplies and took the view that there was only one question in dispute, namely whether Ingliston’s supplies qualified for the reduced rate of VAT.[37]We understood from this that neither party wished to submit that Ingliston made different supplies with different VAT treatments. We also had no evidence that would enable us to quantify any such different supplies. We have therefore proceeded on the basis that Ingliston made only one type of supply, and that it is our task to determine the VAT rating of that supply.[38]We have carefully considered the submissions and evidence of both parties, but have not found it necessary to refer to every argument and authority that was put to us, nor to describe every part of the evidence.

Was Ingliston supplying a right of admission?

[39]HMRC’s submissions on this question may be summarised as follows.(1) Ingliston’s supplies were far more than simply a “right of admission”. While paying customers had the right to access the pitlane area, they typically only spent a few seconds in the pitlane before entering a car. The supplies also involve the use of a vehicle, tuition, and supervision.(2) The essence of Ingliston’s supplies was really the use of a vehicle, either as a passenger or as a driver. This is demonstrated by the emphasis placed in Ingliston’s terms and conditions, and elsewhere in its website, as well as in Mr Hayes’ witness statement, on customers being offered “driving experiences”.(3) Customers are also provided with a lot of tuition and/or supervision. All customers receive a safety briefing and are always accompanied by a member of staff. If the customer is driving themselves, they are accompanied by an instructor who gives advice on driving technique, braking, cornering etc. In these circumstances the instructor is also providing supervision, in the sense that they are there to ensure the customer’s safety.(4) If the customer is not driving but being driven, the degree of supervision is even higher because they are merely a passenger and the instructor is doing the driving. In addition, this category of customer has been offered tuition (ie to drive themselves) but has chosen not to take up that offer.[40]In our view, Ingliston is making supplies of a “right of admission” within the meaning of Group 16, or supplies of “admission” within the meaning of Item 7. In making this finding we have in mind the guidance from the VAT Tribunal in Twycross Zoo at [22] (with which we agree) that we should give these words their “plain and ordinary meaning”, and that the reduced rate (or in Twycross Zoo, exemption from VAT) is available for a “right of admission, nothing more and nothing less”.[41]It is clear from the types of attraction listed in Group 16 and Item 7 that the meaning of a right of admission is not limited to a right simply to enter and walk around inside a designated area. The fact that Ingliston’s customers spend only a small amount of time walking across the pitlane, compared with the amount of time they spend inside a car, does not mean that the supplies cannot be characterised as a right of admission.[42]Mr Hayes submitted that with the attractions listed in Group 16 and Item 7, people are admitted to enjoy something. We agree. In the case of an amusement park, in our view customers are paying for admission so that they can enjoy the rides. In the case of Ingliston, customers are paying for admission so that they can enjoy driving or being driven in a high-powered car.[43]Mr Winter submitted, and we accept, that the physical environment of an amusement park is different from that which would be experienced by Ingliston’s customers, in that an amusement park offers a large landscaped area. However, we do not accept that the essence of what customers are paying for in an amusement park is the right to walk around a large landscaped area. Even if some customers might choose not to go on the rides, they have still paid for the right to do so.[44]On the question of tuition and supervision, we accept Mr Hayes’s submission that these are provided for reasons of safety. It is, to our minds, very clear that a business which permits members of the public, many of whom will have had no previous experience of driving this type of car, to drive high-powered cars around a track, needs to provide both instruction and close supervision. On the evidence we find, however, that Ingliston provides instruction and supervision so that customers can enjoy their driving experiences safely, rather than as an end in themselves.[45]In the case of customers who choose not to drive themselves, we do not accept that what the staff member in the car is doing can be described as supervision: clearly, they are driving, and will need to give their attention to this, rather than to their passenger.[46]We consider the “essence” of Ingliston’s supplies to be quite different from that of the supplies in Young Driver. In Young Driver, the Tribunal’s findings of fact show that the appellant business emphasised, in its promotional materials, that it was providing driving lessons and that its customers were being taught driving skills. While the driving experiences were designed to be enjoyable and fun, the enjoyment and fun were not the main supply. The Tribunal in Young Driver concluded, at [50], that “the main supply is plainly a supply of driving tuition”.[47]In this case, by contrast, Ingliston’s terms and conditions describe how the business aims to provide a “fun, safe, exciting and memorable” experience, and to ensure that customers will have a “thrilling drive”. We also accepted Mr Hayes’ evidence that the core of Ingliston’s business was to provide fun and enjoyment, not to teach any driving skills over and above those which customers needed to experience the fun and enjoyment in a safe way.[48]Therefore, while we accepted Mr Winter’s submission that we would be expected to follow a previous decision of this Tribunal in a similar case unless we considered it to be clearly wrong, we would distinguish Young Driver on the facts and do not reach the same conclusion.

Was there a qualifying type of attraction?

[49]To benefit from the reduced rate of VAT under Group 16, Ingliston’s supplies must fall within the category of a right of admission to “shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and facilities”.[50]It was common ground that Ingliston was not supplying a right of admission to a show, theatre, circus, fair, amusement park, concert, museum, zoo, cinema, or exhibition. The question in dispute was whether it was supplying a right of admission to a similar cultural event or facility.[51]HMRC’s submissions on this question focused on the CJEU’s judgment in Erotic Center, where at [17] the court held that the events and facilities listed in what is now Item 7:
“have in particular the common feature that they are available to the public on prior payment of an admission fee giving all those who pay it the right collectively to enjoy the cultural and entertainment services characteristic of those events and facilities.”
[52]HMRC submitted that it follows from this passage that there are three key characteristics of the specified attractions in Group 16 and Item 7 which any non-specified attraction must share if it is to fall within the category of “similar cultural events and facilities”:(1) First, the enjoyment of the attraction must be collective rather than predominantly personal—this flows from the words “the right collectively to enjoy”.(2) Second, the collective enjoyment must be specifically by those who have paid the admission fee, not by those who have not—this follows from the words “available to the public on prior payment of an admission fee giving all those who pay it the right collectively to enjoy” (underlining added).(3) Third, there must be a relatively large number of people who have paid the admission fee and are simultaneously deriving collective enjoyment— this follows from the words “available to the public on prior payment of an admission fee giving all those who pay it the right collectively to enjoy” (underlining added), but is also apparent from consideration of the specified attractions which all share this characteristic.[53]HMRC contended that Ingliston’s supplies have none of these characteristics. We do not agree. We provide an overview below of HMRC’s case regarding these three characteristics, and explain why we do not accept these submissions.

Collective enjoyment

[54]We accept, following the guidance from the CJEU in Erotic Center, that the events and facilities listed in Group 16 and Item 7 provide a right to collective enjoyment, and that this “collective” element was missing in the case of the private cubicles under consideration in Erotic Center.[55]HMRC submitted that the driving experiences supplied by Ingliston are predominantly personal. A majority of customers, whether driving or as passengers, are in two-seater vehicles containing just themselves and an instructor. The remainder in four-seater vehicles are with an instructor and a maximum of two other customers. That, according to HMRC, is very different from the collective experience of a concert, fairground, exhibition etc, and is much more akin to the private film cubicles in Erotic Center.[56]We do not accept this submission and find that Ingliston’s supplies do provide a right to collective enjoyment. At any given time there are likely to be multiple cars driving on the same track: an average of around 12. Customers can see the other cars, and will know that the people in the other cars can see them. They may take part in simulated races. Customers in four-seaters are normally with family or friends, and those in two-seaters are not alone in their car as they are always accompanied by an instructor. This is far from a solitary experience, and as such is very different from the private film cubicles in Erotic Center.[57]We would accept that the occupants of different cars have a degree of physical separation from one another that would not be found in, say, the audience of a theatre or cinema (assuming full attendance). However, rides in fairs or amusement parks have a variety of configurations in which customers may be in separate compartments, and may not all be visible to one another. We do not, therefore, consider that collective enjoyment requires customers to be as close together as they would be in a full theatre or cinema.

Enjoyment specifically by those who have paid

[58]On this point we considered HMRC may have read more into the CJEU’s judgment than is merited by the wording. The court said that to be within Item 7, the admission fee should give “all those who pay it the right collectively to enjoy” the services. HMRC submitted that it followed that we should discount any element of enjoyment that is attributable to the people outside the fence (in the “paddock”), because these are not paying customers. According to HMRC, Ingliston’s supplies differ in this respect from a concert, cinema or theme park, where only customers share in the collective enjoyment, and family and friends do not stand outside to watch customers enjoying the attractions on offer.[59]We do not accept that the requirement for the admission fee to give “all those who pay it the right collectively to enjoy” the services means that the collective enjoyment must derive solely from paying customers. Presumably those who pay to take part in a driving experience hope to obtain more enjoyment than those who are merely observers, but in our view the presence of observers can heighten the collective enjoyment of the paying customers.[60]The position is complicated by the fact that some of people in the paddock are non-paying observers, but others are customers who are not driving at that particular time, and others will have arrived without a ticket but, on seeing the driving experiences on offer, decide to pay to participate. The CJEU’s judgment in Erotic Center provides no guidance on how to treat, for these purposes, enjoyment by people who have paid an admission fee but who are not exercising their right of admission at any given time.[61]In case we are wrong on this analysis we find, in any event, that for the reasons we have already given, the subset of customers who, at any one time, are driving or being driven in a car, are experiencing collective enjoyment as a group. This collective enjoyment is heightened by the presence of observers in the paddock, but it is not dependent on it.[62]We accept that in this respect, Ingliston’s supplies are different from those of a concert, cinema or theme park, in that family and friends do not wait around outside the gates of a concert, cinema or theme park, and even if they did it is unlikely that this would be an inherently enjoyable experience. However, the question is not whether Ingliston’s supplies are identical to those of the attractions listed in Item 7; rather it is whether they share the common features identified by the CJEU in Erotic Center, and in this respect we find that they do.

A relatively large number of people

[63]We accept that the attractions listed in Group 16 and Item 7 have in common the feature that one would expect them to be attended by a relatively large number of people at any one time. This also follows, as HMRC submit, from the CJEU’s use in Erotic Center, at [17], of the words “public”, “all” and “collectively”.[64]The law does not prescribe the minimum number of people that will suffice for these purposes, and HMRC have not suggested a number. Instead they point to the number of customers in each car: normally one (in the case of the 16 two-seaters), but sometimes up to three (in the case of the two four-seaters). This, HMRC submit, is not a relatively large number of people akin to those at a concert, fairground, exhibition etc.[65]We have already found that in the case of the driving experiences offered by Ingliston, customers in cars are experiencing enjoyment collectively with other customers in cars. When determining the number of people experiencing collective enjoyment for these purposes, we do not accept that the correct approach is to look at the occupants of a single car. This is to treat a car in the same way as one of the private cubicles in Erotic Center, which we have already found is not an appropriate analogy.[66]At one of Ingliston’s event days, the average number of cars driving at any one time is 12. Therefore, even if all 12 are two-seaters, there will be 12 customers in these cars. There are 18 cars in total, normally carrying (in the 16 two-seaters and two four-seaters) a total of 22 customers: this indicates that there are normally 22 customers inside the gated area, some of whom will be driving and some of whom will be stationary in the pitlane.[67]We did not accept, as HMRC submitted, that “collective” imports a requirement for the enjoyment to be “simultaneous”. We accept that, to be collective, the enjoyment must be within the same timeframe, but “simultaneous” appears to add an additional requirement above that envisaged by the CJEU in Erotic Center.[68]In the case of Ingliston, on a typical event day there may be around 200 pre-booked customers. In our view, 200 customers in a day is clearly a large enough number to meet the requirement for an attraction to be similar to those listed in Group 16 and Item 7. Even if we were to accept HMRC’s submission that the enjoyment must be simultaneous, we would find that simultaneous enjoyment by 12 customers is sufficient to meet the CJEU’s description of an attraction that is available to the “public”, giving “all” who pay the admission fee the right “collectively” to enjoy the facility.

Whether similar to a fair or amusement park

[69]Mr Hayes submitted that Ingliston’s supplies could be considered to be similar to those of a fair or amusement park. Mr Winter responded that this was an inappropriate analogy, drawing attention to the CJEU’s definition of an “amusement park” in Phantasialand at [30], where it held that:
“the expression ‘amusement park’ denotes a landscaped site containing various facilities for recreation and amusement, whereas a ‘fair’, although, in general, also possessing the same facilities, is characterised by the fact that it takes place, albeit with a certain regularity, for a temporary period.”
[70]HMRC submitted, and we accept, that the term “amusement park” must be interpreted uniformly throughout the EU, that a strict interpretation is appropriate, and that the term must be interpreted in accordance with everyday language.[71]HMRC further submitted that Ingliston’s supplies self-evidently do not fall within the meaning of an “amusement park” as defined in Phantasialand. This is particularly the case because the “facilities for recreation and amusement” described in that case are explicitly ones found in both amusement parks and fairs, ie fairground rides and the like. According to HMRC, supercars are very different from fairground rides, in that customers receive tuition from an instructor and are in a car with a small bubble of people, unlike in a rollercoaster where customers are surrounded by other people. Moreover, an amusement park has multiple attractions, whereas Ingliston does not. In an amusement park, customers wander around a large decorated area, and this is part of the attraction.[72]We remind ourselves that the question is not whether Ingliston’s facility is a fair or amusement park; it is common ground that it is not. The question is whether it is a “similar cultural event or facility” to any of the attractions listed in Group 16 and Item 7. If every business, to benefit from the reduced rate, had to demonstrate that it was an amusement park, fair etc, then the words “similar cultural event or facility” would have no function.[73]On the question of how to interpret, in a VAT context, whether something is “similar” to something else, we have found it helpful to have in mind the observations of the Court of Appeal in HMRC v Procter & Gamble UK [2009] EWCA Civ 407 where Lord Justice Jacob said, at [19]: “In the end it was a matter of overall impression”.[74]Our overall impression is that the facility provided by Ingliston is similar to a fair or amusement park. Members of the public attend Ingliston’s event days with the purpose of having an enjoyable day out. Customers buy tickets which give them access, at designated times, to a gated area in which they drive, or are driven, in “supercars” which are marketed as providing a thrilling experience. Customers derive excitement from driving, or being driven, fast in a high-powered vehicle around an off-road track. Many, or most, fair and amusement park rides share the features of speed, thrills and excitement; others (such as dodgems and go-karts) are even more similar in that customers can drive vehicles themselves.[75]We note that Ingliston’s facility is peripatetic. In line with the CJEU’s observations in Phantasialand, a fair would be expected to be peripatetic, but an amusement part would not. As such we consider this to be a neutral factor in the question of whether Ingliston’s facility is similar to a fair or amusement park.[76]HMRC drew attention to what was said in Young Driver at [55] and [56] on the subject of whether the appellant business in that case was offering an experience that was similar to a circus or fair. At [55], the Tribunal contrasted a circus or fair, which has a range of attractions around which customers are free to wander, with the appellant business, which offered a specific pre-booked experience in a fenced off area. At [56], as described above, the Tribunal rejected an argument that the experiences supplied by the appellant in that case were comparable with a dodgem car ride.[77]We have already found that the supplies made by Ingliston are different from the supplies made by the appellant in Young Driver. This means that even if (which is not the case) we were bound by the decision in Young Driver, the comparison made by the Tribunal in that case between the appellant business and the attractions specified in Group 16, is not the same as the comparison we must make between Ingliston’s business and those same attractions.[78]We accept that a fair or amusement park has multiple attractions, whereas Ingliston does not. Mr Hayes drew attention, in this context, to the different experiences sold by his business such as the two-seaters versus four-seaters, extra laps and so on, but we agree with HMRC that this is not the same as the multiple attractions in a large area provided by an amusement park.[79]Again, however, to succeed in this appeal Mr Hayes does not have to demonstrate that Ingliston’s facility is a fair or amusement park. What we must decide is whether Ingliston provides a facility that is similar to a fair or amusement park, interpreting that term strictly and in accordance with everyday language. In our view, for the reasons we have given, the answer is yes.

Additional points raised in submissions

[80]Mr Hayes, on behalf of Ingliston, made submissions on two other areas, which we allude to here briefly as we wish to make clear that we did not take these submissions into account in reaching our decision.[81]The first set of submissions concerned a redacted letter relating to another taxpayer which was included in the hearing bundle at Mr Hayes’ request. The letter was from HMRC. Mr Hayes submitted that it demonstrated HMRC’s approach to another business, which Mr Hayes considered to be similar to his own.[82]We explained to Mr Hayes during the hearing that we would not be able to take into consideration HMRC’s treatment of another business, as we knew very little of the circumstances of that other case and HMRC are bound by confidentiality not to disclose information about a different taxpayer. We have therefore taken no account of the redacted letter in reaching our decision.[83]The second set of submissions concerned the very significant difficulties experienced by Ingliston, and Mr Hayes personally, during the covid pandemic. Related to this, Mr Hayes submitted that Ingliston was precisely the type of hospitality and leisure business that Parliament had intended to assist through the temporary VAT reduced rating brought in by Group 16.[84]We have accepted the truthfulness of all Mr Hayes’ witness evidence, and this includes his evidence about the hardships he and his business went through during the pandemic. We also accept that the covid pandemic explains the timing of the introduction of Group 16.[85]For the purposes of deciding this appeal, however, our approach has been to interpret Item 7 and Group 16 in line with the guidance provided by the CJEU in cases including Erotic Center and Phantasialand, and to apply this interpretation to our findings of fact. We do not consider that it would be right for us to place an additional gloss on our interpretation of these provisions because Group 16 was introduced at the time of the pandemic, and we have not done so.

Disposition

[86]For the reasons we have given, Ingliston’s appeal is allowed.[87]As a result, the VAT assessment for period 10/20 is discharged, and Ingliston is entitled to recover input tax of £13,109.20 (the original claim was for £15,200.67, but this is reduced due to the inaccuracies discovered by HMRC, as referred to above).

Right to apply for permission to appeal

[88]This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. Release date: 22nd MAY 2025

Cited in 2 later judgments