Independent VAT Consultant
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VAT: Skating on thin ice

Skates hired for children were a separate supply to the admission fees to the rink and therefore zero-rated for VAT.

9th Oct 2020
Independent VAT Consultant
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Skates for children were zero-rated for VAT.
Skates for children were zero-rated for VAT.

Three-year saga

At long last, we may have seen the final chapter of the long-running saga of VAT tribunal cases involving The Ice Rink Company Ltd/Planet Ice (Milton Keynes) Ltd.

The facts of the case are very straight-forward. When a child goes ice skating at a rink and pays an extra fee to hire a pair of skates, in addition to the admission fee, does this involve two separate supplies? The taxpayer claimed this was two supplies, with the hire of skates for children being zero-rated (VATA 1994, Sch 8, Group 16, Item 1). The admission charge is standard rated. 

Taxpayer win in 2017

The initial decision made by the FTT (TC06117) went in favour of the taxpayer. The tribunal rejected HMRC’s argument that children were receiving a single standard rated supply of “skates with admission.”

I wrote about the case: HMRC skated over mixed supplies issue, and suggested that HMRC should review their guidance on the subject of mixed supplies. I suspect this has not happened because the department is probably struggling with the finer details of this tricky subject, as we all do at times.

Upper tribunal in 2019

HMRC surprisingly appealed the FTT verdict to the UT, which concluded that the FTT had considered the wrong question. The FTT needed to look at the transaction from the view of a typical customer who needed both the skates and admission to the rink, and not a customer who might not need the skates.

The UT was not saying the FTT had reached the wrong decision but that it needed to reconsider the issue from a different viewpoint. The case was sent back to FTT.

Taxpayer wins again in FTT  

The second FTT hearing (TC7829) reached the same conclusion of there being a mixed supply last month:

“We have come to the view that the typical consumer of the package would not regard themselves as receiving a single supply of admission and hire of skates, but two separate supplies and that it would by no means be artificial in this case to split the supply of the package into its two separate components.”

The judges compared the facts with similar case law and noted that there was a supply of both goods (the hire of skates) and a service (the admission fee), which is different to the situation where an extra payment is closely linked to one or the other. It was also noted that the person paying for the admission and skates was not the person who benefited from them, ie parents are paying for their child.

Consistency with car seats

The reason I am as pleased with this result is because it means we have consistency with the other recent case that involved a hiring of goods for children. This was the decision that an optional payment to hire a child’s car seat was a separate supply to that for hiring the car: Europcar Group UK Ltd (TC7733). In other words, the VAT treatment of optional extras in both cases is separate to the main supply. Hurrah!

The hire of children’s car seats is subject to 5% VAT, as I explained in my article: Mixed supplies cause child car seat confusion.


It is worrying that we have passed the 20th anniversary of the landmark Card Protection Plan case, heard in the European court in 1999 (C-349/96), which was supposed to give certainty over the VAT treatment of mixed supplies, but the subject continues to challenge both HMRC and taxpayers.

It might be time for HMRC to review the principles of mixed supplies and issue some updated guidance. Whoops, I think I’ve written that before somewhere...

Replies (1)

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By Mikesch
15th Oct 2020 12:17

Another shocking waste of tax payers' money. Enough said!

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