Lucky Voice Group Limited v The Commissioners for HMRC [2026] UKFTT 903 (TC)

[2026] UKFTT 00903 (TC)Case No TC 09918
FIRST-TIER TRIBUNAL
TAX CHAMBER
Hearing Heard on: 2-3 February 2026Date Judgment date: 16 June 2026
Taylor House, London
Appeal reference: TC/2024/05217
VAT – karaoke rooms – temporary reduced rate – item 1 of Group 16 of Schedule 7A of the Value Added Tax Act 1994 – right of admission – “shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas and exhibitions and similar… facilities” – cultural – fiscal neutrality – appeal dismissed.
Further submissions: 12, 13 and 15 May 2026
Before
TRIBUNAL JUDGE BLACKWELL
Between
LUCKY VOICE GROUP LIMITEDAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentTom Elek for AppellantMax Schofield of counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs for RespondentsDECISION

Introduction

[1]The Appellant (“Lucky Voice”) operates karaoke venues and related activities in London and Brighton. The supplies in dispute concern private karaoke rooms.[2]The core issue in this appeal is whether the relevant supplies are subject to VAT at the temporary reduced rate of 5% that was introduced during the Covid-19 pandemic for:
“supplies of a right of admission to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas and exhibitions and similar cultural events and facilities…”
[3]The relevant provision is item 1 of Group 16 of Schedule 7A of the Value Added Tax Act 1994 (respectively “Item 1”, “Group 16”, “Schedule 7A”, and “VATA 1994”).[4]Lucky Voice submitted an Error Correction Notice to HMRC on 2 February 2024 in which it claimed a refund from HMRC in respect of overpayment of a total of £262,152.66 of output tax covering, the VAT quarters ending 9/20, 12/20, 03/21, 6/21, 9/21, 12/21, 3/22.

Issues in Dispute

[5]The issues in dispute are:(1) whether the supply is a “right of admission” to a “similar cultural facility” to “shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas and exhibitions”. Lucky Voice accepts that the supply is not admission to an event. Lucky Voice also accepts that the supply does not fall within the enumerated list of nouns and so they must rely on the supply being “similar”. The Tribunal is therefore required to make findings including whether the supply is (i) a “right of admission”; (ii) to a “cultural facility”; (iii) which is “similar” to the enumerated list of nouns;(2) the relevance of HMRC’s guidance of 9 July 2020 “VAT on admission charges to attractions” and of the speech of the Chancellor of the Exchequer when introducing the legislation to the construction of Item 1; and(3) whether HMRC’s treatment of Ten Pin Bowling with regard to the temporary reduced rate is relevant, either because this shows HMRC were acting unfairly or having regard to the principle of fiscal neutrality.

Hearing

[6]I have considered:(1) a hearing bundle of 325 pages;(2) an authorities bundle of 1,192 pages and supplemental authorities bundle of 268 pages;(3) Lucky Voice’s skeleton argument of 31 pages; and(4) HMRC’s skeleton argument of 23 pages;(5) HMRC’s written submissions dated 12 May 2026 of 12 pages;(6) Lucky Voice’s written submissions dated 13 May 2026 of 12 pages;(7) HMRC’s response submissions dated 15 May 2026 of 5 pages; and(8) Lucky Voice’s response submissions dated 15 May 2026 of 6 pages.[7]At the hearing we heard live witness testimony from:(1) Mr Charles Elek, the managing director of Lucky Voice; and(2) Megan Stoughton, the Head of Finance of Lucky Voice.[8]The hearing commenced with a site visit to the premises of Lucky Voice Holborn, 84 Chancery Lane, London WC2A 1DL. Both witnesses were sworn in and Mr Charles Elek conducted a tour of the premises from the perspective of the customer experience. We were taken from the entry point (where there would be security), the bar area, the reception desk and into three of the karaoke rooms. The operation of the karaoke equipment was demonstrated, including showing how songs were selected, and how the terminal could be used to both control the ambiance of the room and order refreshments. No singing took place.[9]I found both witnesses to be credible and reliable in their evidence, which was consistent with each other and with the objective evidence before the Tribunal.[10]On return to Taylor House, after dealing with preliminary housekeeping matters, I heard from both witnesses and then heard submissions from both parties. The parties had agreed that (as is normal before this Tribunal in Scotland, although less frequent in the rest of the UK) that there would be no opening submissions. Parties’ Arguments Appellant’s case

Parties’ Arguments

[11]Lucky Voice submits that the fees charged for use of its private karaoke rooms constitute supplies of a right of admission to a qualifying attraction within Group 16 of Schedule 7A. It argues that the charges, although described as “room hire”, are calculated on a per‑person basis and incorporate the grant of controlled entry to a designated room, subject to conditions on dress, intoxication, age and behaviour. It says that these restrictions demonstrate that the supply is not the hire of premises or equipment but an admission‑based supply comparable to the right to enter an auditorium in a multiplex cinema, where entry to the venue is free but payment is required for admission to a particular screening.[12]Lucky Voice contends that its venues constitute “similar cultural events and facilities”. It relies on the characteristics identified in Erotic Center BVBA v Belgium (Case C-3/09) [2010] STC 1018 (“E. Centre”) – that qualifying supplies are available to the public on payment of an admission fee and grant those who pay the right collectively to enjoy cultural or entertainment services – and says these characteristics are present. Customers attend in groups, and the activity is inherently collective. Only those who have paid the fee may enter the room. It is said that the service is analogous to admission to amusement parks, cinemas and other entertainment facilities, where customers pay to access equipment or infrastructure designed for shared enjoyment.[13]Lucky Voice places weight on the decision in Ingliston Driving Experiences Ltd v HMRC [2025] UKFTT 564 (TC) (“Ingliston”), submitting that collective enjoyment need not depend on interaction across groups and can be satisfied where a group participates together in an activity within a designated space. It also submits that karaoke facilities are properly to be regarded as cultural, relying on the broad approach to “cultural” in EU jurisprudence and the prominence of karaoke as a social and entertainment activity in the UK and internationally.[14]A further aspect of Lucky Voice’s case concerns HMRC’s treatment of ten‑pin bowling. Relying on published accounts and a letter circulated by the Tenpin Bowling Proprietors Association, Lucky Voice states that HMRC accepted in 2022 that leisure bowling fell within Group 16 and, for a period, permitted the reduced rate to be applied to karaoke rooms operated within bowling venues. Lucky Voice submits that this demonstrates that HMRC has recognised activities of a similar character, and that karaoke and bowling form part of the same experiential leisure sector.[15]Lucky Voice places particular emphasis on fiscal neutrality. It contends that karaoke rooms and leisure bowling are substitutable leisure activities competing for the same customers, and that differential VAT treatment distorts competition. It argues that the principle requires similar services to bear the same VAT burden and that HMRC’s approach has conferred an advantage on those operators whose karaoke facilities were treated as qualifying when co‑located with bowling. It also says that it is unfair for HMRC to treat karaoke and ten pin bowling differently.[16]Finally, Lucky Voice submits that the purpose of the temporary reduced rate, introduced as part of emergency measures to support hospitality and tourism, supports a broad construction of Group 16. It says its venues are “attractions” of the kind the legislation was intended to assist and that its supplies therefore fall within the reduced‑rate category.

HMRC’s case

[17]HMRC submits that Lucky Voice’s supplies fall outside Group 16. The reduced‑rate provision is an exception to the standard rate and must be interpreted strictly. The relevant statutory phrase is, HMRC says, a composite expression which must be read as a whole. On HMRC’s analysis, Lucky Voice supplies neither a “right of admission”, nor a “similar” event or facility, nor anything “cultural” within the meaning of the provision.[18]As to the nature of the supply, HMRC characterises Lucky Voice’s service as the hire and use of a private booth with audio‑visual equipment. Customers already enter the venue without charge; the fee is for exclusive use of a room. The contractual terms and marketing consistently describe “room hire” and the use of equipment, with no suggestion that customers are being admitted to an event. HMRC argues that the essential character of the supply is exclusive use of facilities, which is not “admission” of the kind envisaged by Group 16. It relies on the EU Implementing Regulation excluding the “use of facilities” from the concept of admission and on the reasoning in The Young Driver Training Ltd v HMRC [2023] UKFTT 271 (TC) (“Young Driver”) that a supply comprising more than mere admission cannot be re‑characterised as one.[19]HMRC submit that Lucky Voice’s activity is not “similar” to the listed examples. The listed attractions all involve curation, organisation and presentation by the supplier, with cultural or entertainment content delivered to an audience. By contrast, Lucky Voice provides a private space in which customers entertain themselves. The supplier contributes no performance, display or curated experience. HMRC argues that similarity must be assessed in context and cannot be extended beyond the bounds implicit in the list.[20]On “cultural”, HMRC argues that the term carries public and societal significance in this statutory context and connotes an activity forming part of collective heritage or organised cultural experiences. It relies on the approach in English Bridge Union Ltd v HMRC (Case C-90/16) EU:C:2017:814; [2017] STC 2317 (“English Bridge Union”) and contends that Lucky Voice is not imparting culture but providing private leisure entertainment. The fact that customers may sing does not, in HMRC’s submission, supply cultural content for VAT purposes.[21]HMRC further submits that Lucky Voice’s booths do not constitute an “event” or “facility” of the type covered by Group 16, as the statutory scheme is concerned with collective public experiences rather than private, self‑contained social activities. It cites E. Centre as emphasising that the listed attractions share the feature of collective public enjoyment, in contrast with private cubicles or booths.[22]On fiscal neutrality, HMRC argues that the principle cannot be used to extend the reduced rate beyond the statutory wording. It submits that fiscal neutrality cannot create a new category of reduced‑rate supply and that karaoke is not interchangeable with the listed attractions. Even if leisure bowling were treated differently by HMRC, the principle cannot be used to redraw the statutory boundary.[23]Finally, HMRC submits that the Tribunal cannot take into account HMRC’s treatment of other taxpayers, including any decisions relating to ten‑pin bowling, nor can it entertain challenges to HMRC’s conduct or compliance with duties of candour. Its task is confined to determining the VAT liability of Lucky Voice’s supplies on the facts and law applicable to this case. Law Statutory construction[24]In Williams v Central Bank of Nigeria [2014] UKSC 10; [2014] AC 1189 (“Central Bank of Nigeria”) at [72] Lord Neuberger explained how:
“When interpreting a statute, the court’s function is to determine the meaning of the words used in the statute. The fact that context and mischief are factors which must be taken into account does not mean that, when performing its interpretive role, the court can take a free-wheeling view of the intention of Parliament looking at all admissible material, and treating the wording of the statute as merely one item. Context and mischief do not represent a licence to judges to ignore the plain meaning of the words that Parliament has used. As Lord Reid said in Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591, 613, ‘We often say that we are looking for the intention of Parliament, but that is not quite accurate. We are seeking the meaning of the words which Parliament used’.”
[25]In the context of VAT it is settled law that exemptions (including the reduced rates) are to be construed strictly: E. Centre at [15]; Phantasialand v Finanzamt Brühl (C-406/20) at [29]. However a strict interpretation is not the same as a restricted construction: Expert Witness Institute v C&E [2001] EWCA Civ 1882; [2002] STC 42 at [17] per Chadwick LJ; C&E v Zoological Society of London (Case C-267/00); [2002] STC 521 at [17] per Advocate General Jacobs.[26]In their submissions HMRC have suggested that not only is the reduced rate to be interpreted strictly but it is “particularly marked” where it is not mandated by EU law, citing News Corp UK & Ireland Ltd v HMRC [2023] UKSC 7; [2023] STC 446 (“News Corp”) at [39]. I disagree with that submission, which selectively quotes from the decision in News Corp. When the relevant paragraph (and indeed sentence) is read as a whole it is clear that the Supreme Court is referencing the existence of zero-rating under the standstill provision, being a national provision which is tolerated within the constraints of the EU standstill provision. That is quite different from the position here, being an exemption which EU law permits member states to introduce.[27]When classifying supplies for VAT purposes the appropriate starting point is usually the contractual position, which may then be vitiated by any relevant facts: Airtours Holidays Transport Limited v HMRC [2016] UKSC 21; [2016] STC 1509 at [47] and [49] (“Airtours”).

EU VAT Framework

[28]The EU Principal VAT Directive (“PVD”) (Council Directive 2006/112/EC, at the relevant time) permitted Member States the option to apply a reduced rate of VAT under Art.98 and Annex III, Item 7 to supplies of: “admission to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and facilities”.[29]This exemption was considered in E. Centre. The case concerned “amounts received by E. Center for the use of individual cubicles for watching films located on the premises of that company.” The relevant European legislation was at that time in the Sixth Directive, but identical to the equivalent wording in the PVD. This had been implemented into the relevant Belgian legislation as an exemption for:
“Granting the right of admission to establishments for culture, sports or entertainment, as well as granting the right to make use thereof, with the exception of: (a) granting the right to make use of automated recreation devices; (b) providing movable goods.” (a) granting the right to make use of automated recreation devices; (b) providing movable goods.”
[30]E. Centre argued that the supply must be categorised as a “cinema” as referred to in the Sixth Directive, arguing that “the number of seats, the type of film shown or the method of projection used are, in particular, irrelevant for the purposes of such a classification.” The Belgian government argued that “such cubicles cannot be classified as a ‘cinema’ since they are not spaces in which a group of people can together watch the same film, started without any intervention by the audience, which has paid for admission in advance.” Rather they argued that the cubicles were classified as “automated recreation devices”, since “the films are started by inserting coins into a device with the possibility of switching from one film to another”. The hof van beroep te Gent therefore referred the following question to the CJEU for a preliminary ruling:
“Should a cubicle consisting of a lockable space where there is room for only one person and where this person can watch films on a television screen for payment, where this person personally starts the film projection by inserting a coin and has a choice of different films, and during the time paid for can continually modify his choice of projected films, be regarded as a ‘cinema’ as referred to in the Sixth… Council Directive … Annex H, Category 7…?”
[31]The CJEU decided the question as follows:
“Consideration of the question referred for a preliminary ruling 13. As is apparent from its wording, the first paragraph of Category 7 in Annex H to the Sixth Directive relates to the ‘admissions’ to various cultural events and facilities listed therein (see EC Commission v Germany (Case C-109/02) [2006] STC 1587; [2003] ECR I-12691, para 25), including in particular ‘cinemas’. 14. In the absence of a definition in the Sixth Directive of the concept of admissions to a cinema referred to in Category 7 in Annex H, that concept should be interpreted in the light of its context within the Sixth Directive (see, to that effect, EC Commission v Spain (Case C-83/99) [2001] ECR I-445, para 17). 15. In that regard, and as has previously been noted by the court, it follows from art 12(3)(a) of the Sixth Directive that the application of either one or two reduced rates of VAT is an option accorded to the member states as an exception to the principle that the standard rate applies. Moreover, according to that provision, the reduced rates of VAT may be applied only to supplies of the goods and services specified in Annex H to that directive. It is settled case law that provisions which are in the nature of exceptions to a principle must be interpreted strictly (see, inter alia, Commission v Spain (paras 18 and 19) and the case law cited). 16. It follows in particular that the concept of admissions to a cinema must be interpreted in accordance with the usual meaning of those words (see, to that effect, Commission v Spain (para 20), and Commission v Germany (para 23)). 17. Furthermore, and as was stated by the Belgian government and the European Commission, the various events and facilities listed in the first paragraph of Category 7 in Annex H to the Sixth Directive 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. 18. It follows from the above that the concept of admissions to a cinema within the meaning of the first paragraph of Category 7 in Annex H to the Sixth Directive cannot, in light of the usual meaning of that term and the context of the provision within which it is included, be interpreted as meaning that it covers the payment made by a customer so as to be able to watch on his own one or more films, or extracts from films, in private cubicles such as those in issue in the main proceedings. 19. Therefore, the answer to the question referred for a preliminary ruling is that the concept of admissions to a cinema referred to in the first paragraph of Category 7 in Annex H to the Sixth Directive must be interpreted as meaning that it does not cover the payment made by a customer so as to be able to watch on his own one or more films, or extracts from films, in private cubicles such as those in issue in the main proceedings.”
[32]The dispositif stated:
“The concept of admissions to a cinema referred to in the first paragraph of Category 7 in Annex H to EC Council Directive 77/388 of 17 May 1977 on the harmonisation of the laws of the member states relating to turnover taxes – common system of value added tax: uniform basis of assessment, as amended by EC Council Directive 2001/4 of 19 January 2001, must be interpreted as meaning that it does not cover the payment made by a customer so as to be able to watch on his own one or more films, or extracts from films, in private cubicles such as those in issue in the main proceedings.”

UK VAT

[33]Section 29A VATA 1994 provides for a reduced rate, of 5%, on the supplies specified in Schedule 7A.[34]Schedule 7A, titled “Charge at a Reduced Rate”, was modified by The Value Added Tax (Reduced Rate)(Hospitality and Tourism)(Coronavirus) Order 2020 (SI 2020/728) so as to implement Item 7 of Annex III to the PVD, from 15 July 2020 to 12 January 2021, inserting: “Group 16 – Shows and certain other attractions 1. Supplies of a right of admission to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas and 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”.[35]The reduced rate was extended from 12 January 2021 to 31 March 2021 under the Value Added Tax (Reduced Rate)(Hospitality and Tourism)(Extension of Time Period)(Coronavirus) Order 2020 (SI 2020/1413), which came into force on 11 January 2021.[36]Then, by way of sections 92 and 93 of the Finance Act 2021, the 5% reduced rate was extended until 30 September 2021, and modified to a 12.5% rate ending 31 March 2022.[37]By way of contextual background, when introducing the legislation the Chancellor of the Exchequer stated:
“So today, we act with a plan for jobs. Our plan has a clear goal: to protect, support and create jobs…The final part of our plan will protect jobs that already exist by helping some of our highest‐employing but hardest‐hit sectors: hospitality and tourism. Our economy relies on consumption, especially social consumption: the pubs, cafés, restaurants, hotels and B&Bs that bring life to our villages, towns and cities. So the best jobs programme we can do is to restart these sectors and get our pubs, restaurants, cafés and B&Bs bustling again. First, at the moment, VAT on hospitality and tourism is charged at 20%, so I have decided, for the next six months, to cut VAT on food, accommodation and attractions. Eat‐in or hot takeaway food from restaurants, cafés and pubs; accommodation in hotels, B&Bs, campsites and caravan sites; attractions like cinemas, theme parks and zoos – all these and more will see VAT reduced, from next Wednesday until 12 January, from 20% to 5%. This is a £4 billion catalyst for the hospitality and tourism sectors, benefiting over 150,000 businesses and consumers everywhere – all helping to protect 2.4 million jobs.”
[38]In response to opposition comments, the Chancellor continued:
“The Hon. Lady talked about conditionality on funds that we provided. Here, she has to choose. It cannot be that you can develop significant interventions to provide liquidity and cash support to businesses at scale and speed, while at the same time having an incredibly targeted approach, imposing conditions on individual businesses. You have to choose one or the other. We unashamedly chose the former.”
[39]Lucky Voice relies on HMRC’s guidance on the temporary reduced rate (published on 9 July 2020 and last updated on 23 December 2022). It is entitled “VAT on admission to attractions”. It bullet lists the various nouns included in Item 1, ending with “similar cultural events and facilities”. It then states:
“Examples of where the reduced rate may apply could be attractions such as: • a planetarium • botanical gardens • studio tours • factory tours”
[40]I find little assistance from these passages. I accept that the purpose of the legislation was to support the hospitality and tourism sectors at scale and speed. However, while Mr Sunak refers to avoiding an “incredibly targeted approach”, that does not mean, having regard to the purpose of the legislation, that the Tribunal can take what Lord Neuberger in Central Bank of Nigeria described as a “free-wheeling view” of the legislation. Nor does it allow the Tribunal to depart from the rule that exemptions must be construed strictly.[41]I note that both Mr Sunak and the guidance refers to “attractions”, however I do not consider that colours the interpretation of the statutory language. There is no ambiguity that would allow resort to Hansard (nor would this passage in Hansard resolve any ambiguity in the present case).[42]In any event I find the examples given by the guidance so far from private karaoke rooms as not to be of any relevance.[43]For completeness I note that, while Group 16 is titled “shows and certain other attractions” that is not a permissible aid to construction: s 96(10) VATA 1994. Case

Law

[44]Group 16 has been previously considered by this Tribunal in two cases.[45]In Young Driver the appellant supplied pre‑booked “driving experiences” for children aged 4-17, conducted on fenced‑off private land. Although customers gained physical access to the area in which the activity took place, the Tribunal found that what was supplied was a package comprising use of a vehicle together with driving tuition and supervision. That supply went well beyond any “right of admission”. The Tribunal held that the experiences were neither admission to any of the listed attractions in Group 16 nor sufficiently similar to them. They were private, one‑to‑one instructional sessions, not comparable to shows, fairs, amusement parks or other curated or collective cultural events. The fiscal‑neutrality argument failed because the services were not interchangeable, from the perspective of the typical consumer, with the attractions covered by Group 16. The appeal was therefore dismissed.[46]In Ingliston,the appellant provided “supercar driving experiences” at off‑road venues, where paying customers drove or were driven in high‑powered cars. Event days typically involved around 200 customers and multiple cars circulating on the track simultaneously. The Tribunal found that Ingliston’s supplies constituted a “right of admission”, as the essence of the supply was admission to a controlled area in order to participate in the activity. The Tribunal further held that the activity was a “similar cultural event or facility”. Applying E. Centre, it found that the experiences involved collective enjoyment: numerous customers were on the track at the same time, in sight of one another, and the presence of spectators enhanced rather than negated the collective element. A significant number of paying participants attended on each event day. Assessing similarity on an overall‑impression basis, the Tribunal concluded that Ingliston’s activities were sufficiently akin to a fair or amusement park, sharing features of speed, excitement and recreational thrill. The appeal was allowed. “Admission”[47]In Twycross Zoo East Midland Zoological Society Limited v HMRC (2007) Decision 20439 (“Twycross Zoo”) the Tribunal (Chaired by Lady Mitting) considered whether separately‑charged “animal encounters” fell within the exemption for the supply by an eligible body of a “right of admission to a… zoo” in Item 2 of Group 13 of Schedule 9 VATA 1994. Visitors had already paid the standard admission fee giving access to the zoo and its general cultural services. For an additional payment they could participate in a short, pre‑booked encounter involving close contact with an animal under the supervision of keepers, including feeding, instruction, photographs and a certificate. The Tribunal found that the essence of the encounter was a distinct and enhanced experiential package going well beyond what was included in ordinary admission. Construing the exemption strictly but not restrictively, it held that “right of admission” referred to physical admission to the zoo and could not be extended to encompass a discrete range of benefits of this kind. The encounters were therefore a single taxable supply falling outside the exemption.[48]In Twycross Zoo at [16] Lady Mitting set out Ms Whipple’s submissions for the appellant at [16] which she accepted at [22]:
“16. For the Appellant, Ms Whipple pointed out that the Directive requires Member States to exempt the supply of ‘certain cultural services’ but it is left to each individual Member State to determine the scope of their own domestic cultural exemption. The UK has exempted the right of admission to… a Zoo and it is that wording which has to be construed strictly but not unduly restrictively. The liability of animal encounters will depend upon whether what is supplied falls within the exempting provision of Item 2. If not, it falls to be taxed at the standard rate. Ms Whipple contended that when a member of the public purchased an animal encounter, he was buying an experience separate from and far beyond what was included in the general admission charge. The legislation does not exempt all the cultural services by the Zoo but merely the right of admission to it. This wording is perfectly plain and if what is supplied is beyond that right of admission, it falls to be taxed. To include within the definition of ‘a right of admission’ supplies above and beyond that right of admission, would be to widen the scope of the exemption to an unacceptable degree. Not only was it a corruption of the wording but it would be a distortion of the legislation. … 22. 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.”
[49]Lady Mitting then went on to find that the animal encounters were not a separate “admission” to a designated area:
“24. I also cannot accept Ms Sloane’s alternative contention that what is being supplied here is a right of admission to a designated area within the Zoo and as such, although a separate supply, would fall to be an exempt supply of a right of admission. What the Zoo is supplying here is, as I have said, a package or a range of benefits. The Zoo is not merely supplying the right of admission to a part of the Zoo to which the general public would not normally be allowed access. Indeed, the venue of the encounter varies. Further, if Ms Sloane’s argument was correct, it would mean that the location of the encounter became the defining element in its tax treatment which both advocates accepted would not be a sensible conclusion. The encounter with the elephants and the giraffes would be exempt because the encounter took place within an enclosed area but the encounter with the gibbons would not because it took place in a public area.”
[50]In Young Driver Judge Williams, after considering the discussion of “right of admission” in Twycross Zoo at [16] and [22] found:
“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. … 50. The expectation of those booking and paying for the Experience is, not that the child is granted a right of admission to the fenced off area but, as detailed on the Appellant’s website, that the child will be taught to drive the vehicle almost immediately and spend the remainder of the time period allotted to the Experience (30 or 60 minutes) driving the vehicle.”
[51]It will be recalled that in E. Center the CJEU referred at [17] to how:
“the various events and facilities listed in the first paragraph of Category 7 in Annex H to the Sixth Directive 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]This suggests that “admission” ordinarily refers to shared collective enjoyment. This accords with the “plain and ordinary meaning” of the word admission. If I go for a morning swim, my admission entitles me to share the pool with others who similarly pay admission. Conversely, if I was to hire the entire swimming pool (for example for a children’s birthday party) I would not be paying admission but hire. But if I happened to be the only one in the pool, perhaps as the first to arrive, when more might be admitted, I would still have paid for admission.[53]HMRC rely on Article 53 of the PVD that states: “Article 53 The place of supply of services in respect of admission to cultural, artistic, sporting, scientific, educational, entertainment or similar events, such as fairs and exhibitions, and of ancillary services related to the admission, supplied to a taxable person, shall be the place where those events actually take place.[54]Which is clarified by the EU VAT Implementing Regulation (Council Implementing Regulation (EU) No 282/2011) at Art.32 as follows:
“Article 32 1. Services in respect of admission to cultural, artistic, sporting, scientific, educational, entertainment or similar events as referred to in Article 53 of Directive 2006/112/EC shall include the supply of services of which the essential characteristics are the granting of the right of admission to an event in exchange for a ticket or payment, including payment in the form of a subscription, a season ticket or a periodic fee. 2. Paragraph 1 shall apply in particular to: (a) the right of admission to shows, theatrical performances, circus performances, fairs, amusement parks, concerts, exhibitions, and other similar cultural events; (b) the right of admission to sporting events such as matches or competitions; (c) the right of admission to educational and scientific events such as conferences and seminars. 3. Paragraph 1 shall not cover the use of facilities such as gymnastics halls and suchlike, in exchange for the payment of a fee.”
[emphasis to show parts relied on by HMRC] (a) the right of admission to shows, theatrical performances, circus performances, fairs, amusement parks, concerts, exhibitions, and other similar cultural events; (b) the right of admission to sporting events such as matches or competitions; (c) the right of admission to educational and scientific events such as conferences and seminars.

[emphasis to show parts relied on by HMRC]

[55]HMRC accept this provision is not in issue in the appeal, but say that it shows the VAT legislation using similar language and excluding “use of facilities” from the concept of “admission”.[56]I do not accept this argument based on the place of supply provisions to be relevant or persuasive, since this provision does not directly map onto the language of the legislation in issue in Item 1. It omits reference to “museums” and “zoos” and refers only to “similar events”, omitting the possibility of similar “facilities” (perhaps especially significant as Lucky Voice says that the service in question is a facility not an event). “Similar”[57]With regard to an assessment of similarity in HMRC v Proctor & Gamble UK [2009] EWCA Civ 407; [2009] STC 1996 (“P&G”) Jacob LJ emphasised (at [19]) that it “was not incumbent on the Tribunal in making its multifactorial assessment [to] spell out item by item how each was weighed as if it were using a real scientist’s balance.” Determining similarity requires both fact finding and evaluative judgment: P&G at [47][58]With regard to what is similar Mr Schofield took us to CEC v Quaker Oats Ltd [1987] STC 683, 688c. However, in the context of that decision, I consider that passage to be narration of the arguments of the taxpayer in that case, rather than judicial commentary. Accordingly I place no reliance on it.[59]It will be recalled that in E. Centre at [17] the CJEU held that the various events and facilities in Group 16 had 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.”
[60]This seems to be a partial definition of similarity, as it specifies that they share a specified “common feature”, but leaves open the question of what are the “cultural and entertainment services characteristic of those events and facilities”.[61]In Ingliston Driving Experiences Limited v HMRC [2025] UKFTT 00564 (TC) Judge Gauke observed at [63] that the attractions listed in Group 16 “have in common the feature that one would expect them to be attended by a relatively large number of people at any one time.” She found (at [68]) that “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.”[62]With regard to the requirement of “collective enjoyment”, Judge Gauke stated: “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 E. 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 E. 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.[63]The notion of collective enjoyment (see [46] to [47] above) also has relevance for whether something is “similar”, as it is a general feature of shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas and exhibitions: E. Center at [17].[64]In their skeleton argument HMRC identify the following common features of shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas and exhibitions:(1) a high degree of curation, organisation, and exhibition by the supplying party;(2) audience orientation, with a performance or display for the audience’s appreciation; and(3) active staging and input by the supplier (often with multiple amenities or attractions), to impart a cultural feature to a broader public audience, promulgating and furthering the cultural experience. A customer may have some lesser involvement, but the customer cannot be supplying their own culture: the cultural element must be conveyed by the supplier.[65]I accept these are potentially relevant factors, however they are neither exhaustive nor necessarily required. That is shown by the inclusion in the list of nouns of “fairs” and “amusement parks” – those two attractions are orientated to active participation, rather than a passive audience which is not well captured in how HMRC phrase (2) and (3). What is necessary for similarity is that the requirements of E. Centre at [17] are met – but as I have noted that leaves open the question of what are the “cultural and entertainment services characteristic of those events and facilities”. “Cultural… facility”[66]In English Bridge Union the CJEU considered whether duplicate bridge was a “sport” within the meaning of Art.132(1)(m) PVD. It found that it was not a sport, since sport relates only to activities characterised by a not negligible physical element. However, the CJEU went on to note:
“28. That interpretation is without prejudice to the question whether an activity with a physical element that appears to be negligible may, where appropriate, be covered by the concept of ‘cultural services’ within the meaning of art 132(1)(n) of the directive, if the activity, in the light of the way in which it is practised, its history and the traditions to which it belongs, in a given member state, holds such a place in the social and cultural heritage of that country that it may be regarded as forming part of its culture. In that regard, the court has held that the corresponding provision in Directive 77/388 allowed the member states.a discretion in determining the cultural services exempted (see, to that effect, judgment of 15 February 2017, HMRC v British Film Institute (Case C-592/15) [2017] STC 681, para 24).”
[67]Whilst in that case the court did not follow the opinion of Advocate General Szpunar, his characterisation of the country-specific nature of culture is consistent with the judgment of the CJEU:
“43. Finally, I should like to stress the cultural component inherent in art 132(1)(m) of the VAT Directive. While the definition of ‘sport’ is, as seen above, an autonomous one of EU law, sight should not be lost of the fact that many sports are regional in nature and not present throughout the EU. This is, for instance, the case with hurling in Ireland or with kumoterki in Poland. Also, some sports are more prevalent in some countries or regions than others. More British or French citizens participate in, say, rugby than Polish citizens. In a similar vein, it appears to me that contract bridge boasts a higher degree of participation in the United Kingdom, Ireland and the northern countries of the European Union than elsewhere. Regional perceptions should, therefore, enter into account when the term ‘sport’ is determined in an autonomous manner on an EU level.”
[68]The country specific nature of “culture” was also considered by Advocate General Bot in HMRC v British Film Institute (Case C-592/15) [2017] STC 681 (“BFI”), which concerned 132(1)(n) PVD, where in his opinion he commented:
“23. The broad discretion given to member states in relation to exempting supplies of cultural services is not surprising. Cultural traditions and regional heritage are very varied within the European Union and sometimes within the same member state. There are as many cultures as there are member states. It is therefore entirely logical that member states are the best placed to identify the supplies of cultural services that are most appropriate to serve the public interest, since I would recall that art 13A of the Sixth Directive refers to exemptions for certain activities in the public interest.”
[69]This passage was expressly endorsed by the CJEU in its judgment at [22].[70]However, neither of these passages relate to the provision in issue, namely the reduced rate in Art.98 and Annex III PVD. Rather, both English Bridge Union and BFI relate to Art.132 which concerns a mandatory exemption for certain activities in the public interest, specifically including:
“(m) the supply of certain services closely linked to sport or physical education by non-profit-making organisations to persons taking part in sport or physical education; (n) the supply of certain cultural services, and the supply of goods closely linked thereto, by bodies governed by public law or by other cultural bodies recognised by the Member State concerned;”
[71]Both these passages therefore do not relate to the provision in issue. I find that they are therefore of limited assistance, although I do accept that(i) what is cultural can vary between countries; and(ii) therefore whether something is perceived as “cultural” in the UK is relevant. Indeed, this much appears to be common ground with the appellant that observes in their submissions that leisure and recreation are generally described as cultural to the extent they are shaped by social norms, values and identity.[72]Mr Schofield submitted that in the relevant expression in group 1 “cultural” only qualifies “similar… events and facilities” and neither colours the interpretation of the various preceding nouns (“shows, … and exhibitions”) nor is it its interpretation coloured by those preceding nouns. It will be recalled the phrase is:
“supplies of a right of admission to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas and exhibitions and similar cultural events and facilities…”
[73]As a matter of pure semantics, Mr Schofield’s argument is a plausible interpretation. But, semantically, another interpretation is that cultural also refers back as well as forward, and so the interpretation of “culture” can be coloured by the preceding list of nouns. Support for this latter interpretation is found in E. Center at [13] where the CJEU states that: “first paragraph of Category 7 in Annex H to the Sixth Directive relates to the ‘admissions’ to various cultural events and facilities listed therein”.[74]Again, in E. Center at [17] the CJEU states that: “the various events and facilities listed in the first paragraph of Category 7 in Annex H to the Sixth Directive 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.” [my emphasis of “cultural” in both quotes]

[my emphasis of “cultural” in both quotes]

[75]It is clear from these passages that the CJEU considered that “cultural” (and entertainment) describe the list of nouns and do not merely restrict the interpretation of what is “similar”. Accordingly I reject HMRC’s argument (as set out at [65], above). This also supports Lucky Voice’s argument, which I agree with, that “cultural” is not restricted to “highbrow activities”: amusement parks and cinemas are not generally regarded as highbrow: although some arthouse cinemas may specialise in films that could be so categorised.[76]Mr Schofield submitted that items 1 and 2 of Group 13 of Schedule 9 VATA 1994 assisted the understanding of “cultural”. The items state:
“1. The supply by a public body of a right of admission to– (a) a museum, gallery, art exhibition or zoo; or (b) a theatrical, musical or choreographic performance of a cultural nature. 2. The supply by an eligible body of a right of admission to– (a) a museum, gallery, art exhibition or zoo; or (b) a theatrical, musical or choreographic performance of a cultural nature.” (a) a museum, gallery, art exhibition or zoo; or (b) a theatrical, musical or choreographic performance of a cultural nature. (a) a museum, gallery, art exhibition or zoo; or (b) a theatrical, musical or choreographic performance of a cultural nature.”
[77]Mr Schofield suggested that it may be inferred that not all musical performances are cultural. However, the language of this provision does not track that of Item 1. Accordingly, I do not find it assists the Tribunal in interpreting Item 1.[78]In summary, I accept that culture is country-specific. I consider it encompasses both high-brow and popular culture.

Findings of Fact

[79]I make the following findings of primary fact:

Background

[80]Lucky Voice operates karaoke venues and related activities in the UK.[81]The business was founded in 2005 by Martha Lane-Fox (now Baroness Lane-Fox) and Nicholas Thistleton-Smith, who remain its principal shareholders. From the beginning Lucky Voice’s stated mission has been to “spread happiness” by hosting an “unforgettable singing experience.”[82]In March 2020 Lucky Voice operated four karaoke venues. These were located in Soho, Islington, Holborn and Brighton. Across these venues there were 33 private karaoke rooms, accommodating up to 366 customers in total. The maximum capacity of each room varies between four and thirty customers.[83]Lucky Voice’s business was significantly affected by the Covid‑19 pandemic. All four venues closed on 20 March 2020, reopening only briefly between October and December 2020, before fully reopening in May 2021.

Bar area

[84]Each venue has a communal bar area, where customers can eat, drink and dance. There is no admission fee to the bar area, which (subject to capacity) is open to the general public without having to pay an admission fee. However the majority of the customers in the bar area also pay to use a private karaoke room during their visit.[85]There is a DJ in the bar area at the weekend.

Private karaoke rooms

[86]On entering a private karaoke room customers are given a short welcome speech by a Lucky Voice staff member, which includes a demonstration of how the karaoke equipment works as well as addressing certain safety issues, such as the location of the fire exit. The speech lasts for approximately 3 minutes.[87]Each private karaoke room has a terminal. A touch screen display can be used to select songs, which can be chosen from curated playlists and also from a catalogue of about 13,000 songs. The room booker can also upload a playlist from the catalogue. The terminal has three sliding toggles to control the sound. It also has buttons to call bar staff to order drinks and control the ambience of the room. Physically the terminal has some resemblance to a jukebox. The terminal is designed to be easy to use by customers, even if they have had a few drinks. Separately from the terminal, there is a large screen in each room on which the lyrics of the song being played are displayed. There are two wireless microphones in each room.[88]Whilst the catalogue of about 13,000 is large, it is not one of the largest karaoke catalogues. This is because other companies include multiple versions of the same song: for example ten versions of Dancing Queen, including rock and acoustic versions. Lucky Voice do not do that, as they want to provide the best customer experience by providing the best songs people want to sing and keeping things simple. Whilst the catalogue is large, the top 100 songs account for about 70% of the plays. The UK catalogue is tailored specifically to the UK. Lucky Voice also has a business in Dubai, the catalogue of which would include more Arabic songs.[89]Each private karaoke room is set up with seating (although most people stand/dance), lighting (including a disco ball), décor and karaoke equipment to make it conducive to groups of family, friends and colleagues wishing to spend time together enjoying and entertaining themselves by singing, dancing, drinking and eating. They are designed and furnished to create an appealing group entertainment environment, with karaoke equipment forming less than 25% of the construction cost of each room.[90]Generally the private karaoke rooms are fully soundproofed. An exception is the room adjoining the bar at the Holborn venue, which is only partially soundproofed to contribute to the ambiance of the bar area. While fully soundproofed rooms have padded walls, that room has album art on the walls.[91]The private karaoke rooms are monitored on CCTV, which is viewed at the reception.[92]Each private room is available to be hired out to customers on an hourly basis, with each customer paying an hourly charge for admission to the private room. The cost of room hire is therefore dependent on the number of customers seeking admission, regardless of the room’s capacity. For example, if 10 people hire a room with a capacity of 12, the charge will be based on the 10 people being granted admission to the room rather than on 12 people.[93]Private karaoke rooms are available for booking by the public who either pre-book, principally via Lucky Voice’s website, or simply walk-in. Over the past 5 years, the proportion of pre-booked customers has gone down from 67% in 2020 to 64% in 2025.

Payment

[94]Receipts given to customers normally describe admission fees as “room hire”. This figure is calculated by combining the total fees charged to individual customers for entry to the karaoke rooms.[95]When rooms are booked in advance there are two venues that require a deposit of 50% (Islington and Brighton) and the remaining venues require a deposit of 100%. The deposit is paid by the person making the booking. For walk-ins, and where a 50% deposit has been paid, the full payment must be made before entry to the karaoke rooms. Such payments at the venue can either be made by one person or split between customers.

Terms and conditions

[96]The terms and conditions refer to “total room cost”, “room bookings” and “room hire”, “room prices” and “your room”, for example: “We require 50% down payment of your total room cost when booking online or on the phone for Lucky Voice Soho, Islington and Brighton and 100% payment upfront for Lucky Voice Holborn. For multiple room bookings, kids’ parties and cocktail masterclasses at all venues, we require 100% payment. 100% of your total room cost is also required when booking on the same day of your visit and during the Christmas period (25th Nov – 31st Dec):” “Please note pre booked karaoke room prices differ from walk in karaoke room hire prices.” “Each room has a maximum capacity which will be enforced. Extra guests will be permitted entry to the bar, if space allows. If you continually exceed the maximum amount of people allocated to your room, you may be asked to leave prior to your finishing time and charged in full for your room hire and drinks bill.” “We reserve the right to resell your room if you fail to show up even after 30 minutes past the starting time of your booked session, and may forfeit the paid deposit without refund.” “Promotions offering free or discounted room hire are exclusive of the cost of drinks.” [my emphasis] [my emphasis][97]This contrasts with the terms and conditions of two cinema chains which were exhibited which refers to being “admitted” to an auditorium. Lucky Voice does not use the term admission in the T&Cs to make it clear to the customer what they are getting – as it would be potentially confusing with admission to the venue.[98]The pricing is explained as follows:
“Lucky Voice karaoke rooms are booked for a specified head count and allocated according to capacity. If your party size decreases you will still need to pay for the number agreed upon when booking. Should your party size increase a per person per hour cost will be added.”
[99]The obligations and requirements imposed on customers include the requirements to conform to a smart casual dress code (no sportswear) and not to bring their own food or drinks. Customers must be aged 18 or over.[100]Lucky Voice reserves the right to deny entry to anyone deemed to be intoxicated and prohibits strippers.

Promotional material

[101]Lucky Voice works closely with various tourist bodies such as Visit London and Visit Brighton.[102]Promotional material for Lucky Voice includes: “Looking for karaoke in London? Head to Lucky Voice and rent a private karaoke room. Fill it with you, your mates, a few beers and lots of loud out of tune singing!” [my emphasis] “A favourite of students, locals, tourists, hen and stag dos alike, Lucky Voice Brighton is the perfect antidote to the boredom of another night down the pub.”

[my emphasis]

[103]Promotional material for ten pin bowling alleys that include karaoke include:

[my emphasis]

“Whether it’s a whispered soft ballad or a belted-out rock classic, you can give it your all and not worry about the consequences – apart from seeing your family and friends with their fingers in their ears” “It’s the ultimate karaoke conundrum – which songs will showcase your unique vocal talent” “And as they’re private and sound-proofed, it means that even if you’re tone deaf and can’t hold a tune, you can boldly sing away to your heart’s content without inflicting it on anyone but the family or friends you’re there with – and they’ve probably heard it all before” “• Sing your heart out with friends and family • You can sing proudly in a specially designed room • Choose from thousands of songs”
[104]A poster at the venue refers to “50% off room hire Sunday to Friday”. [my emphasis].

Ten pin bowling

[105]The following findings, relating to ten pin bowling, are accepted as the unchallenged evidence of Mr Charles Elek and/or Megan Stoughton:[106]HMRC’s treatment of certain ten pin bowling venues first came to the attention of Lucky Voice in August 2023.[107]On 11 August 2024 Propel, an online service which provides subscribers with morning briefings concerning the hospitality industry, published an article stating that during the year, All Star Lanes (“ASL”) reclaimed VAT on bowling and other leisure activities paid to HM Revenue and Customs during 2021.” The article went on to say that “the business said it successfully argued that the temporary reduced rate of VAT introduced to assist the hospitality and leisure industries recover from the effects of the pandemic should be applied to these revenue streams.”[108]This led Mr Charles Elek to investigate further and correspond with HMRC. He drew their attention to the published disclosures by ASL, Ten Entertainment plc and, especially Hollywood Bowl plc in its 2022 audited accounts that stated “we received confirmation on 12 April 2022 that HMRC agreed that there is indeed a clear distinction between the sport of competitive bowling and the leisure activity of bowling – with the latter being able to benefit from TRR of VAT retrospectively.”[109]Mr Charles Elek was aware that the ASL venues included private karaoke rooms as well as ten pin bowling. Thus he contacted the Managing Director of ASL on 11 January 2024 to enquire if the “other leisure activities” in respect of which it had successfully reclaimed VAT, as referred to in the Propel article, as well as in ASL’s audited accounts for the year ending 25 December 2022, included VAT charged on admission to ASL’s karaoke rooms. ASL’s Managing Director responded the following day, confirming that the credit did include the karaoke facilities.[110]Attached to that email from ASL’s Managing Director was a redacted copy of a letter from ASL to HMRC dated 27 July 2022, to be used by Lucky Voice as a template. In this letter ASL made its claim to HMRC to apply the temporary reduced rate in respect of both its bowling and karaoke activities. This letter also contained the text of a letter that had been agreed between HMRC and the Tenpin Bowling Proprietors Association in which HMRC had agreed that “leisure bowling” was an activity which fell within Group 16. The reason given by HMRC for including tenpin bowling within Group 16 was that it was a “leisure” activity.[111]This led to Lucky Voice filing an error correction notice on 2 February 2024. HMRC rejected that claim on 17 May 2024. On 31 May 2024, some 2 weeks after rejecting Lucky Voice’s claim, HMRC wrote to ASL to inform them that HMRC had reversed its decision to include karaoke within Group 16.[112]HMRC has refused to discuss with Lucky Voice the treatment of ten pin bowling, citing taxpayer confidentiality. Discussion Admission

Discussion

[113]I accept that the per-head pricing model points in the direction of admission, perhaps particularly in cases (such as walk-in bookings) where each member of the party pays their own fee.[114]However, I have noted that “admission” ordinarily refers to shared collective enjoyment (see [46]-[47] above). In the present case groups pay for the exclusive use of a private karaoke room. While there is shared collective enjoyment within the group, the (generally) sound-proofed nature of the rooms means that it confined to that group.[115]The starting point for classifying the supplies is the contractual arrangements (Airtours at [47] and [49]). They refer to, “room bookings”, “room hire”, “room prices”, “room hire prices” and “total room cost” – which points to the supply being for exclusive use of a room rather than admission.[116]I do not consider the right to use the facilities in the karaoke room prevent the payment being for admission – that would be no different to a fair or theme park where admission could include free access to the rides. However, the group is getting something over and above the right to access the karaoke room, being exclusive use of the private karaoke room and the use of the equipment in the room.[117]Viewing the facts in the round I do not find that the payment is made for admission. Accordingly (ignoring issues of fiscal neutrality and unreasonableness) the appeal fails on this basis. However, I consider other parts of the statutory test in case I am wrong with regard to admission.

Similar

[118]With regard to the common characteristics identified by HMRC of the enumerated list of nouns (see [64] above), I make the following findings:(1) there is a high degree of curation, organisation, and exhibition by Lucky Voice in the curation of the music catalogue, themed playlists and the creation of the ambience of the private karaoke rooms (eg the jukebox style terminal and the disco ball);(2) there is audience orientation, the singing is to the audience of the wider group. While sometimes, as Mr Charles Elek explained, the whole group will sing together sharing the two microphones, the “audience” are then the singers. Even in such instances the accompanying music and ambience is still being provided by Lucky Voice to its customers.(3) there is active staging by Lucky Voice through the provision of the accompanying music. The involvement of the singers is similarly active. However there are examples in the enumerated list of nouns where customers can be very active participants. For example site-specific and immersive theatre; sing-along cinema (when musical films are played); participatory exhibits at museums; and stalls at fairs (such as dodgem cars, the helter-skelter, coconut shies and shooting galleries). With amusement parks the customer will generally be an active participant: even when strapped in on the roller coaster the customers’ screams and actions as they throw their hands in the air are an integral part of the drama of the ride. I acknowledge that more frequently than not attractions within the enumerated list of nouns will involve a fairly passive audience, but consider there to be frequent exceptions. Accordingly, I find that the degree of participation by Lucky Voice’s customers is not a weighty factor against Lucky Voice in the assessment of similarity.[119]During submissions HMRC placed emphasis on the proposition that “the customer cannot supply their own culture”. I accept that, in many of the events and facilities enumerated in Group 16, the cultural or entertainment content is curated, organised or presented by the supplier for the benefit of a passive audience. However, that does not appear in the statutory language, nor does it constitute a freestanding legal test. The question posed by Item 1 is whether the supply is a right of admission to a “similar cultural event or facility”, to be determined by reference to the words of the provision read in their context. The decision of the CJEU in E. Centre makes clear that the relevant enquiry focuses on whether the event or facility forms part of a class of events or facilities which share certain common features, notably being 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. The analysis is therefore directed to the nature and the characteristics of the supply, not to the source of the cultural element of the customer experience.[120]I also consider that, related to collective enjoyment, the degree to which the facility is enjoyed in common with others, and specifically other members of the general public, is a relevant consideration. This would appear to be a spectrum, rather than a simple binary categorisation. At one extreme would be the “lockable space where there is room for only one person”, which was the subject of the appeal in E. Centre. At the other extreme would be the ordinary museum, cinema or theatre experience (or any of the other enumerated nouns), where customers can see other customers and share the auditorium (or other relevant space) with others who are not in their group. The present case is somewhat intermediate between these extremes. As the appellant observes, the activity is inherently collective. Here each participant shares the private karaoke room with a number of others, however all those others form part of the group that booked (either in advance, or on-the-door) together.[121]Whilst the appellant places reliance on Ingliston, it is apparent there that the circumstances are very different to this case. There, whilst the majority of customers were in “two-seater vehicles containing just themselves and an instructor”, they could “see the other cars, and will know that the people in the other cars can see them” and might also “take part in simulated races”: Ingliston at [55]-[56]. Conversely, in this case each group is isolated in a soundproofed room. There is no interaction between the groups.[122]So, while participants are paying to access equipment and infrastructure designed for shared enjoyment, the lack of interaction with the general public is a feature of the private karaoke rooms that distinguishes them from the ordinary museum, cinema or theatre experience (or any of the other enumerated nouns).[123]Considering the above factors in the round, I do not consider the supply of private karaoke rooms to be similar to the various enumerated nouns.[124]I might have reached a different finding if the supply had been of public karaoke (such as booths or cabaret style tables, allowing for more interaction between groups, with singing from a main stage). Similarly, I may have reached a different finding if, say, the setup had been private karaoke rooms, each with a different theme (eg rock, hip-hop, new romantics) and members of the general public could wonder in and out of each room. However, any such finding would need to be based on a holistic assessment of any alternative circumstances. I say this to be clear that this decision should not be taken as authority for karaoke not being similar to the enumerated nouns. The finding simply is that the supply of private karaoke rooms in the circumstances of this case is not similar.

Cultural… facility

[125]I accept that some public singing in the UK would generally be regarded as cultural. For example most people would regard a cultural singing in school assemblies, sporting events and (traditionally at least) around the piano in a pub, especially in the East End of London. It however does not follow that all public singing is cultural.[126]In support of the karaoke being cultural, Lucky Voice points to how it is a mainstream part of the UK’s hospitality industry. In support of this they point to the extent of their business (five venues with a capacity of 366 customers at any time), in addition to the capacity of competitors.[127]Lucky Voice also points out that they work with UK tourist bodies such as Visit Brighton and Visit London, which suggests that their karaoke facilities are part of UK culture.[128]I accept these to be relevant factors.[129]I consider that the UK specific curated nature of the catalogue (see [90] above) also points to the supply by Lucky Voice being cultural in the UK. This is fortified by the fact that the top 100 songs account for about 70% of the plays also points to there being a UK specific “canon” of songs.[130]During submissions HMRC placed emphasis on the proposition that “the customer cannot supply their own culture”. However, for essentially the same reasons I gave at [123] above, the fact that customers themselves contribute actively to the experience does not of itself determine whether the event or facility is “cultural”.[131]Whilst cultural must be construed strictly, viewing the evidence in the round I accept that the private karaoke rooms supplied by Lucky Voice would be regarded as a part of popular culture and so a cultural facility.

Fiscal Neutrality

[132]In Rank Group plc v HMRC (Joined cases C-259/10 and C-260/10) EU:C:2011:719; [2012] STC 23 the CJEU summarised the principle of fiscal neutrality as follows:
“32. According to settled case-law, the principle of fiscal neutrality precludes treating similar goods and supplies of services, which are thus in competition with each other, differently for VAT purposes… 33. According to that description of the principle the similar nature of two supplies of services entails the consequence that they are in competition with each other. 34. Accordingly, the actual existence of competition between two supplies of services does not constitute an independent and additional condition for infringement of the principle of fiscal neutrality if the supplies in question are identical or similar from the point of view of the consumer and meet the same needs of the consumer… … 43. In order to determine whether two supplies of services are similar within the meaning of the case-law cited in that paragraph, account must be taken of the point of view of a typical consumer…, avoiding artificial distinctions based on insignificant differences… 44. Two supplies of services are therefore similar where they have similar characteristics and meet the same needs from the point of view of consumers, the test being whether their use is comparable, and where the differences between them do not have a significant influence on the decision of the average consumer to use one such service or the other…”
[133]Further, as the Supreme Court noted in News Corp at [46]:
“in the realm of taxation, the fact that the same social purpose may be served by zero-rating two related items does not mean that they should or will be treated the same way. Taxation involves budgetary and political decision-making and how far to extend exemptions from tax is a budgetary choice. Such decisions are made on a granular basis.”
[134]When determining whether services are regarded as similar for these purposes, a national court is generally expected to make an assessment using its own experience of the world, rather than evidence: Leisure, Independence, Friendship and Enablement Services Ltd v HMRC; The Learning Centre (Romford) Ltd v HMRC [2020] EWCA Civ 452; [2020] STC 898 at [70].[135]Applying the Court of Appeal’s reasoning, and my “own experience of the world”, I consider that a typical consumer would regard the private karaoke rooms supplied by Lucky Voice as being different from both(i) ten pin bowling; and(ii) the enumerated list of nouns. Those differences are precisely why the average consumer would choose (or would not choose) karaoke in comparison to those other supplies. If Lucky Voices customers showed up and were told that their booking could not be accommodated, but they had been re-assigned to a local ten pin bowling alley or to a local cinema complaints would be expected.[136]It follows that the ground of appeal based on fiscal neutrality must fail.

Unfairness

[137]With regard to Lucky Voice’s complaint of unfairness, to be treated differently from ten pin bowling, HMRC rely on the principle in Ingliston at [82] where

Judge Gauke comments:

“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.”
[138]I agree. Even if HMRC have held ten pin bowling to fall within Item 1, we do not know the reason for this, and HMRC are bound by confidentiality not to disclose information about a different taxpayer.[139]Further, on a statutory appeal such as this, it is the task of this Tribunal to apply what it regards as the correct interpretation of the law, rather than extend by analogy concessions that may have been made by HMRC.[140]It follows that the ground of appeal based on unfairness must fail.

Conclusion

[141]The appeal is therefore dismissed.

Right to apply for permission to appeal

[142]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: 16 June 2026