VFOOD4160 - Excepted items: catering: catering tribunals
Some oft-quoted tribunals (which pre date the 2012 changes to the VAT Law) considered some of these points. You may use the following examples to illustrate our interpretation of the ordinary and everyday meaning of catering. The Cope case, in particular clarified the point that, once catering in its everyday usage is identified, you do not need to consider Note (3) to Group 1.
Cope
In Barry Herbert Cope [1981] STC 532 the appellant ran a mobile catering stall at various racecourses selling seafood in disposable containers. At each racecourse he paid a fee to the holder of the catering franchise. He maintained that where no seating was provided his supplies were zero-rated.
The tribunal debated whether his stall or the racecourse was the premises on which the supply was made and consumed. It concluded that the supplies were made from one set of premises, the stall, and consumed in another, the racecourse. The appeal therefore succeeded.
On appeal to the High Court this decision was reversed. The judge disagreed with the tribunal’s interpretation of premises but, more importantly, expressed the view that it was not necessary to invoke Note 3. The trader was supplying food for immediate consumption in connection with an event (the race meeting), and the supplies were per se in the course of catering and therefore standard-rated.
Vodden
In the case of RV Vodden (MAN/84/0074), the trader, a butcher, advertised a service offering eleven menus ranging from open sandwiches to set meals, which he delivered to homes or to functions such as weddings and funerals. He claimed that his supply was one of delivered bulk items to third parties who themselves undertook the catering. He charged VAT only when he provided a service with the food.
The tribunal accepted that it was the host or organiser of the function, rather than the individual consumer, who received and paid for the meals.
In dismissing the appeal, however, the tribunal ruled:
The dividing line between a standard-rated supply and a zero-rated supply … is not governed by the sole consideration whether or not a service associated with catering is supplied. It lies primarily in the supply itself and the occasion on which the supply is made.
The trader supplied food ready for immediate consumption in individual portions, and, the supply was linked to a function organised by the recipient. Such supplies were therefore made in the course of catering and standard-rated.
Chasney
In the case of C Chasney Ltd (LON/88/1375X), the trader, a retail grocer, delivered a variety of ordered foodstuffs to customers prior to parties and similar events. He also sold from the shop buffet boxes containing a cold meal and the necessary cutlery and condiments. Customs and Excise argued that both supplies were made in the course of catering. The trader argued that the supplies were zero-rated grocery items.
The tribunal ruled that the buffet boxes were supplied in the course of catering and therefore standard-rated because the contents of each box
- were completely ready for consumption,
- came with cutlery and condiments, and
- were supplied as incidental or ancillary to some function or event.
When the supply was not linked to a function or event it was not in the course of catering.
However, the foodstuffs delivered for parties often required a high degree of preparation such as cooking, warming up, the opening of a tin, de-frosting, slicing and were correctly zero-rated. An exception was the case of a customer who merely had to remove the wrapping from platters set out by the appellant.
Safeway Stores
Safeway Stores [1997] STC 163 was for a long time the leading case on the issue of catering. The case concerned supplies of party trays, which consisted of a range of trays made up for use at such events as cold buffets. Customs and Excise argued that they were supplies in the course of catering.
The tribunal, later vindicated by the High Court, found that the supplies were not of catering and the sales were zero-rated. The decision focuses on the view of the ordinary person, and what they would consider to be catering. An important focus was also placed on the service accompanying the supply of food.
Compass Contract
The tribunal decision in the case of Compass Contract UK Ltd (MAN/03/0707) contained a long and thorough discussion of what constituted catering and premises. The case was subsequently appealed to the Court of Appeal ([2006] EWCA Civ 730), and the case has now become the leading precedent on the two subjects.
The case concerned a contract catering company that operated a number of units within the BBC Television Centre in London. The units operated by Compass varied from small tea bars to restaurants and canteens. At issue was the liability of cold food such as biscuits and sandwiches sold from the tea bars.
HMRC’s policy was that the whole of the BBC site, which was a restricted access site, was the premises for the purposes of Note 3(a). Compass argued that the premises should instead comprise solely the unit that the retail sales were made from.
After a lengthy and comprehensive hearing, the tribunal decided in favour of Compass. HMRC took the appeal to the Court of Appeal, which upheld the decision on premises and the decision on catering per se, though the judges were split 2-1 on the catering issue.
The decision on catering discussed a large number of previous cases on the subject, though most notably the Cope and Safeway Stores decisions, which are often extensively quoted in tribunals considering catering.
For HMRC’s revised policy on premises, see section VFOOD4500.