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Cite as: [2005] UKVAT V19014

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Blackpool Pleassure Beach (Holdings) Ltd v Customs and Excise [2005] UKVAT V19014 (12 April 2005)

19014

VAT — amusement park operator — market-value vouchers — whether voucher offer by appellant to selected pairs of visitors to one park on payment of £52 for two vouchers including voucher claimed by appellant to be market-value voucher worth £16 for wristband for a single person at another park made for consideration — if so, whether vouchers face-value vouchers or supplied for consideration — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

BLACKPOOL PLEASURE BEACH (HOLDINGS) LIMITED Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: David Demack (Chairman)

Sitting in public in Manchester on 14, 15 and 16 February 2005

Miss Valentina Sloane of counsel instructed by Messrs Baker Tilly, chartered accountants, Manchester, for the Appellant

Mr Owain Thomas of counsel instructed by the solicitor for the Customs and Excise for the Respondents

DECISION

Introduction

This case is concerned with face-value vouchers, a term defined in paragraph 1(1) of Schedule 10A to the Value Added Tax Act 1994 (see paragraph 21 below). A trader who issues such a voucher is required to account for output tax on it if, and thus only when, it is redeemed.

During the summer of 2003, the appellant company, Blackpool Pleasure Beach (Holdings) Ltd ("BPB"), by a company within its VAT group, offered a customer at its Blackpool Pleasure Beach amusement park on payment of £26 a wristband entitling him to enjoy unlimited rides on one day. But selected pairs of customers, each one purchasing such a wristband, were also presented with a voucher for a free one-day wristband for one person at BPB's Southport Pleasureland amusement park. As the cost of a one-day individual wristband at Pleasureland was £16, BPB claimed to have issued a pair of participating customers with a face-value voucher to that value. The Commissioners of Customs and Excise did not accept that BPB had issued a face-value voucher in those circumstances, and by letter of 19 December 2003 required it to account for output tax on the £52 consideration received, rather than on the £36 for which it had been accounting. BPB appealed against that requirement and was on 27 January 2004 assessed to tax of £10,277. Its appeal has been treated throughout as against the assessment.

The Commissioners' principal case is that there was no consideration for the vouchers issued by BPB. Alternatively, first, they maintain that the vouchers were not face-value vouchers and, secondly, they contend that, if the vouchers were face-value vouchers, they were supplied for consideration. The success of any one of those claims would be fatal to BPB's appeal.

The Facts

I base my findings of fact on the contents of an agreed bundle of copy documents, and the parol evidence of Mr Peter Cornthwaite, the group finance director of BPB, Mr Philip Levy and Mr Jonathan Wheeler, both of whom are specialist tax avoidance officers of the Commissioners.

BPB is the representative member of a group, the companies in which operate amusement parks. Amongst its parks are Blackpool Pleasure Beach and Southport Pleasureland. The former is the larger of those two, having an income from ride wristbands in 2002 of £8.3 million. Entrance to both parks is free, but customers are required to pay to take rides of their choice. They may purchase tickets for individual rides, or for ride wristbands which entitle them to take unlimited rides in a specified period.

In 2002, as part of a general business review, BPB considered with its accountants and VAT advisers ways of increasing revenue by the use of business promotion schemes. It was attracted to a voucher offer designed to encourage customers to spend money at sites other than the one they were visiting. BPB expected that, if implemented, such an offer would increase sales revenue, and provide VAT benefits both in its not having to account for tax until vouchers were redeemed and in its not being liable for tax on unredeemed vouchers. It was advised that the tax benefits would be greater the lower the percentage rate of voucher redemption, and would continue to be beneficial until the redemption rate rose to about 15 per cent.

BPB was particularly interested in introducing an offer that would generate additional income at Pleasureland, that park being unprofitable. It concluded that it would be sensible for any offer to relate to ride wristbands, for 50 per cent of its income consisted of ride income, and of that about 60 per cent was attributable to ride wristband sales. Further, since most customers at BPB sites arrived in pairs, it considered that if it provided a voucher for one person to visit Pleasureland, it could expect to receive additional income both from a ride wristband sale to the person accompanying the voucher holder, and other purchases by the pair. 2003 was considered "ripe" for a voucher offer as Southport had received European and English tourism funding, and was being redeveloped as a major tourist destination. In 2003, the full price of a one-day wristband for an individual at the Pleasure Beach was £26, and at Pleasureland £16. But many customers paid less than the full price as BPB offered customers a variety of discount vouchers and money-off coupons. BPB determined to offer selected pairs of Pleasure Beach customers, each buying a one-day ride wristband for £26, a voucher for a free one-day ride wristband for one person at Pleasureland, the offer to run from 7 July 2003 to 24 August 2003 ("the voucher period"). (But, in the event, the voucher offer was not made from 19 to 22 July, and from 2 to 10 August 2003 (all dates inclusive) when BPB made other offers). The voucher could not be used in connection with any other then current promotional offer of BPB, and was valid only until 28 September 2003; it could not be exchanged for cash, or for any other wristband or ticket.

BPB advertises its promotional offers through the press, by handing out promotional leaflets and brochures, and on its website. But the Pleasureland voucher offer was not advertised by any of those means. Nor was it mentioned in BPB's price lists – boards about 4 feet high and 2 feet 6 inches wide containing details in letters and numbers about 2½ ins high of its various tickets and wristband prices. The price lists are located at each entrance to the Pleasure Beach, and at each till counter behind the till operator.

The Pleasureland voucher offer was not made to all pairs of Pleasure Beach customers purchasing two one-day wristbands, but only to those pairs selected by BPB's till operators, at their discretion. If those customers who received the voucher offer did not wish to take advantage of it, under its terms and conditions of trade as amended for the duration of the voucher period (see paragraph 13 below) they were entitled to purchase the two wristbands for the discounted price of £36. But BPB's till operators were instructed not to offer the discounted price to pairs of customers unless they specifically requested it. BPB justified its process of selecting pairs of customers as being aimed at those most likely to take up the voucher offer, e.g. family couples, but it simultaneously allowed it, tap like, to turn the offer on and off whenever it chose. The significance of that ability becomes apparent when account is taken both of an admission by Mr Cornthwaite that if too many discounted tickets had been sold the voucher offer would not have been viable, and the fact that the fewer the sales at the discounted price the more beneficial the voucher offer to BPB in VAT terms. That fact can be demonstrated by comparing an example of the financial benefits of the scheme Mr Cornthwaite prepared for presentation to the BPB board with another, assuming the same number of vouchers issued, but adopting the actual redemption percentage rate achieved (0.0011 per cent – see paragraph 17 below).

Mr Cornthwaite assumed that 10 per cent of pairs of ride wristband sales would be made at a reduced price of £36, and vouchers would be redeemed at a rate of 3 per cent of 100,000 issued. His calculation, which follows, clearly shows that the improvement would in no small measure be due to VAT savings of £208,000.

	£
Cash with promotion	4,544
Cash without promotion	4,426
Total cash saving	118

Total cash saving made up as to:
VAT saved at point of sale	214	(90,000 @ 2.38)	(90,000 @ 2.38)
VAT later incurred at point of redemption	(6)
	208

Impact of BPB sales at reduced value
Gross sales 10,000 @ (16)	(160)
VAT thereon 10,000 @ 2.38	24
	(136)
	72

Additional net sales Pleasureland
Wristbands	28
Non Wristbands	28
Less incremental cost of sales at Pleasureland	(10)
	118

(I need not set out the comparative calculation for it merely substitutes the sub-total of £136.20 for that of £72,000 in the section entitled "Impact of BPB sales at reduced value", giving a resultant total cash saving of almost £190,000 as opposed to £118,000).

BPB has 11 standard terms and conditions of trade. It claims that they are invariably displayed at its ticket counters and information offices. For the reasons set out in paragraph 15 below, I do not accept the claim. The standard terms and conditions, which contain no mention of the prices of tickets or wristbands, are printed on a single sheet of A4 paper, and are displayed in a perspex stand for protection.

BPB added two additional terms and conditions to its standard terms for the duration of the voucher period. For reasons which were not explained, they were included at numbers 7 and 8, and read:

"7. For the period July 7 2003 to August 24 2003 inclusive the price of a pair of adult wristbands purchased together includes a sixteen pounds voucher for one all day wristband at Pleasureland, Southport, redeemable before September 28 2003.

Provided the request is made prior to sale guests who do not want the offer in 7 above may purchase a pair of adult wristbands for a combined price of thirty six pounds."

Coupled with the fact that the additional terms and conditions were inserted about the middle of the amended terms, the values of the items on offer were included in words rather than figures, making them less eye catching and perhaps unlikely to be read by a person scanning the document quickly.

Mr Cornthwaite also claimed that, in time for the launch of the voucher offer on 7 July 2003 and throughout the voucher period, the amended terms and conditions were on display at all main (i.e. approximately 10) ticket counters at the Pleasure Beach, but he admitted that he personally did not check to ensure that they were so displayed. I am unable to accept that claim, and whilst two reasons for my doing so, being findings of fact, immediately follow, I add other reasons at paragraph 46 in my conclusion. On 12 August 2003, Mr Wheeler paid an unannounced visit to the Pleasure Beach. He found but a single copy of BPB's terms and conditions on display in the whole park, and it was in standard terms: it thus contained no mention of the Pleasureland voucher offer. The amended terms and conditions were however on display at some ticket counters on 13 August 2003, when Mr Levy and Mr Wheeler paid a pre-arranged visit to the Pleasure Beach. At some, but not all, of those counters where the amended terms were not to be found, the standard terms were on display.

Mr Cornthwaite explained that, in common with most commercial enterprises, BPB's sales staff are trained to maximise sales revenue, and thus begin by trying to sell BPB's highest priced article (in the case of the Pleasure Beach in 2003, a ride wristband for one person and show tickets valid for one day costing £30). If they are unsuccessful, they then offer couples a pair of ride wristbands (in 2003 for £52). Mr Cornthwaite also said, "Customers will have read the promotional literature and notices at the sales area of the park so will have made an informed choice and know precisely what they want to purchase by the time they reach the front of the queue. Sales staff were expressly instructed that customers who wished to refuse the offer were entitled to a pair of the Pleasure Beach ride wristbands at the discounted price of £36. The fact that customers could refuse the offer is demonstrated by the fact that some did so". I doubt that most customers read BPB's promotional literature and notices, but I accept that BPB's staff were "expressly instructed" that customers refusing the Pleasureland voucher offer were "entitled" to purchase wristbands at the discounted price. (I use the expression "entitled to purchase" advisedly, and contrast it with "offered").

During the voucher period, BPB issued 4502 Pleasureland vouchers (of which 159 were redeemed), but only 5 pairs of wristbands were sold at the discounted price of £36. That represented a rate of 0.0011 per cent of the customers who received the voucher offer. Of those five pairs, Mr Cornthwaite said that two, or possibly three (he claimed to be unable to remember which), were sold to customers who requested the discounted price post-payment, so that whilst strictly not entitled to it, they received it as a "goodwill gesture". I accept his evidence in that behalf as fact.

Two customers paying £52 for a pair of one-day wristbands and receiving the voucher offer during the voucher period received a single printed receipt on which it was stated that they had paid £36 for a pair of adult wristbands at the Pleasure Beach, and £16 for a Pleasureland voucher. The receipt also stated that the moneys paid were "Non-refundable".

The Law.

Although it plays little part in my decision, as a matter of courtesy I include at this point the law governing face-value vouchers. The European law is to be found in EC Council Directive 77/388 of 17 May 1977 ("the Sixth Directive") . It provides at Article 10:

"1. (a) 'Chargeable event' shall mean the occurrence by virtue of which the legal conditions necessary for tax to become chargeable are fulfilled.

2. The chargeable event shall occur and the tax shall become chargeable when the goods are delivered or the services are performed … However, where a payment is to be made on account or goods are delivered or the services are performed, the tax shall be come chargeable on receipt of the payment and on the amount received.

By derogation from the above provisions, Member States may provide that the tax shall be chargeable for certain transactions or for certain categories of taxable person, either … - no later than receipt of the price"

And the relevant parts of Article 11 of the Sixth Directive provide:

"1. The taxable amount shall be:

(a) in respect of goods and services … everything which constitutes the consideration which has been or is to be obtained by the supplier from the purchaser, the customer or a third party for such supplies including subsidies directly linked to the price of such supplies;

3. The taxable amount shall not include:

(b) prices discounts or rebates allowed to the customer and accounted for at the time of supply."

The domestic legislation relating to face-value vouchers was included in the Finance Act 2003 and is now to be found in Schedule 10A to the 1994 Act. Paragraph 1 of Schedule 10A provides:

"(1) In this Schedule 'face-value voucher' means a token, stamp or voucher (whether in physical or electronic form) that represents a right to receive goods or services to the value of an amount stated on it or recorded in it.

(2) References in this Schedule to the 'face-value' of a voucher are to the amount referred to in sub-paragraph (1) above"

Paragraph 4 of Schedule 10A provides:

"(1) This paragraph applies to a face-value voucher issued by a person who—

(a) is a person from whom goods or services may be obtained by the use of the voucher, and

(b) if there are other such persons, undertakes to give complete or partial reimbursement to those from whom goods or services are so obtained.

Such a voucher is referred to in this Schedule as a 'retailer voucher'.

(2) The consideration for the issue of a retailer voucher shall be disregarded for the purposes of this Act except to the extent (if any) that it exceeds the face-value of the voucher.

(3) Sub-paragraph (2) above does not apply if —

(a) the voucher is used to obtain goods or services from a person other than the issuer, and

(b) that person fails to account for any of the VAT due on the supply of those goods or services to the person using the voucher to obtain them".

Paragraph 7 of Schedule 7 provides:

"Where —

(a) a face-value voucher (other than a postage stamp) and other goods or services are supplied to the same person in a composite transaction, and

(b) the total consideration for the supplies is no different, or not significantly different, from what it would be if the voucher were not supplied,

the supply of the voucher shall be treated as being made for no other consideration".

Submissions of the Parties

In relation to the Commissioners' contention that no consideration was attributable to the Pleasureland vouchers, Miss Sloane, counsel for BPB, submitted that their analysis was simply incorrect.

First, she contended that the BPB scheme was wholly different from those schemes in which the courts had held there to be no consideration attributable to vouchers in that:

(1) the amended terms and conditions stated plainly that a customer had paid £16 for a Pleasureland voucher;

(2) the till receipts showed separate payments of £36 and £16; and

(3) customers refusing the voucher were entitled to purchase discounted Pleasure Beach tickets.

In the case of Kuwait Petroleum (GB) Ltd v CCE [1999] STC 488, where the question was whether consideration could be attributed to vouchers for goods (redemption goods) presented to customers who purchased 12 litres of fuel (premium goods), the price of the fuel remaining the same whether or not the customer accepted the vouchers, the Court of Justice of the European Communities ("the ECJ") held that consideration for the redemption goods consisted of an indeterminate part of the VAT inclusive price paid by the customer. Miss Sloane observed that the ECJ had stated that it was for the national court to enquire whether, at the time of purchase, Kuwait and the customer had agreed that part of the price of the fuel constituted the value given for the vouchers; but there was nothing before the court to suggest that there was any such reciprocal performance by the parties (paragraph 27). Moreover, the ECJ noted that there were two factors which suggested that the exchange of goods for vouchers was a disposal free of charge:

(1) under Kuwait's promotion scheme, the redemption goods were described as gifts (paragraph 30); and

(2) it was not contested that the only price referred to on the fuel invoice was the retail price, whether or not the vouchers were accepted.

Similarly, in Hartwell plc v CCE [2003] STC 396, where Hartwell issued vouchers to customers for free pre-MOT inspections on supplying the customers with replacement cars, the Court of Appeal held that there was nothing which constituted separate consideration for supply of the vouchers. Miss Sloane noted that in that case there was no reference to any terms and conditions entitling customers to discounted goods if they refused the vouchers.

Equally, in Tesco plc v CCE [2003] STC 1561, the Court of Appeal, citing Kuwait and Hartwell in support, held that no consideration was attributable to vouchers exchangeable for redemption goods issued to holders of Tesco clubcards on their purchasing premium goods: the amount paid by the clubcard member for the goods was identical to that paid by a non-member. Jonathan Parker LJ held that there was nothing in the clubcard scheme documentation to support Tesco's claim that a clubcard member paid less than the retail price for the premium goods; the economic purpose of the scheme was to encourage customers to make future purchases of redemption goods at preferential rates. Again Miss Sloane observed that there were no terms and conditions entitling customers to a discounted price.

She maintained that the Pleasureland voucher scheme did not disclose the characteristics determinative in the findings in Kuwait, Hartwell and Tesco that the vouchers had been given away free of charge. On the contrary, she submitted, there was documentary evidence of consideration in the amended terms and conditions: separate consideration was shown on the till receipts, and customers were entitled to purchase Pleasure Beach wristbands at a discounted rate.

Mr Thomas, counsel for the Commissioners, observed that in the Kuwait case the court identified no evidential features necessarily to be found before there could be a decision that there had been no consideration: accordingly, BPB's reliance on their absence was unconvincing. He maintained that, having regard to the whole transaction and looking at the Pleasureland voucher scheme objectively, the approach adopted in both the Kuwait and Hartwell cases (as followed in Tesco) led to the conclusion that there was no consideration for the BPB vouchers.

Secondly, Miss Sloane maintained that, as a matter of contract law, consideration of £16 was attributable to the Pleasureland voucher: the Commissioners' contention that the amended terms and conditions could be disregarded as the majority of customers were not aware of them was misconceived; it applied the wrong test. It was well established that it was not necessary for the conditions contained in a standard form document to have been read and understood by a person receiving it, or that he should have been aware of their input or effect. As Lindsay J said in Debenhams Retail plc v CCE [2004] STC 1132 at paragraph 25:

"Ticket cases were . . . decided [in the nineteenth century] in which it was not so much examined whether the particular complainant had read, understood, agreed to or signed any particular terms but whether, on a more objective approach, the existence of the standard terms had been sufficiently brought to the notice of the hypothetical reasonable customer. Individual circumstances such as whether the claimant – customer was illiterate or too hurried to have paused to see that standard terms existed or what they were, were in general irrelevant."

Miss Sloane submitted that the amended terms and conditions were brought sufficiently to the attention of the hypothetical reasonable BPB customer, contending that the Commissioners' own evidence showed that they had been on display at till points and information offices.

She accepted that the test to be applied was that established in the case of Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1987] 1QB 87, identified by Mr Thomas as the only authority on whether an unusual or onerous condition dealing with the price a customer had to pay for a product, and said to have been imposed by one party to a contract, was in fact incorporated into it.

The facts of the Interfoto case were that Interfoto ran a photographic transparency lending library. On its delivery notes, stated in capitals, was a condition that unless borrowed transparencies were returned within 14 days of the date of delivery, a "holding fee" of £5 (plus VAT) per transparency per day would be charged. Stiletto borrowed 47 transparencies, and failed to return them within the 14 day hire period. It was invoiced for a holding fee of almost £3,800. Stiletto refused to pay the fee, and Interfoto bought an action on the invoice. The Court of Appeal held that where clauses incorporated into a contract contained a particularly onerous or unusual condition, the party seeking to enforce that condition had to show that it had been brought fairly and reasonably to the attention of the other party; and, since Interfoto had done nothing to draw Stiletto's attention to the condition in question, (per Dillon LJ) it never became part of the contract, or (per Bingham LJ) Stiletto was relieved from liability under the clause.

Having outlined the facts in Interfoto, Dillon LJ observed that, in the railway ticket cases of the nineteenth century, the courts had looked at the printed conditions as a whole and questioned whether they had been sufficiently drawn to a customer's attention to make them part of the contract; but more recently they had discussed whether it was enough to look at a set of printed conditions as a whole. Then Dillon LJ noted that in Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163 – a case concerned with an exemption clause depriving a party of statutory rights given by the Occupiers' Liability Act 1957 - both Lord Denning MR and Megaw LJ had held that where a contractual condition was particularly unusual or onerous, the party seeking to enforce it must show that it was fairly brought to the notice of the other party. Dillon LJ continued (at p. 438):

". . .[W]hat their Lordships said [in the Thornton case] was said by way of interpretation and application of the general statement of the law by Mellish LJ in Parker v South Eastern Railway Co, 2 CPD 416, 423-424 and the logic of it is applicable to any particularly onerous clause in a printed set of conditions of the one contracting party which would not be generally known to the other party.

Condition 2 of these plaintiffs' conditions [the condition imposing the "holding fee"] is in my judgment a very onerous clause. The defendants could not conceivably have known, if their attention was not drawn to the clause, that the plaintiffs were proposing to charge a "holding fee" for the retention of the transparencies at such a very high and exorbitant rate.

… In the ticket cases the courts held that the common law required that reasonable steps be taken to draw the other parties' attention to the printed conditions or they would not be part of the contract. It is, in my judgment, a logical development of the common law into modern conditions that it should be held, as it was in [the Thornton case], that, if one condition in a set of printed conditions is particularly onerous or unusual, the party seeking to enforce it must show that that particular condition was fairly brought to the attention of the other party."

Consequently, Dillon LJ held that condition 2 of the contract never became part of the contract between the parties.

Bingham LJ (as he then was) dealt with the question of whether Interfoto had fairly and reasonably brought condition 2 of its contract to Stiletto's notice by saying (at p. 445):

"The defendants [Stiletto] are not to be relieved of [an inordinate liability arising from a venial period of delay] because they did not read the condition, although doubtless they did not; but in my judgment they are to be relieved because the plaintiffs did not do what was necessary to draw this unreasonable and extortionate clause fairly to their attention."

Miss Sloane submitted that the reasoning of the court in Interfoto case was of no application to BPB's Pleasureland voucher scheme: the terms and conditions did not impose an onerous, unreasonable or extortionate clause on customers; conditions 7 and 8 could not even sensibly be described as "imposing a detriment" on customers. She contended that there was no obligation on BPB positively to draw to the attention of a customer a term or condition which might be regarded as conferring on him some advantage, such as a discount. The fact that customers might have been in too great a hurry to read the terms and conditions, or could not be bothered to scrutinise them, was, in Miss Sloane's further submission, irrelevant.

Mr Thomas, on the other hand, contended that the Interfoto judgment was in point, and urged me to follow it. He claimed that there was a real detriment involved in BPB's failure to bring to the notice of its customers a potential reduction in consideration for those who did not wish to "pay" for Pleasureland vouchers. Accepting that the nature and degree of disclosure was a matter of evidence, he submitted that the disclosure of the discounted price was plainly inadequate, and disclosure after the contract had been concluded, e.g. on the till receipt, was irrelevant in any event.

Thirdly, Miss Sloane submitted that there was no ground for disregarding the contractual position in favour of an alternative analysis based on the subjective intentions of the parties. She so claimed in reliance on the judgment of Jonathan Parker LJ in the Tesco case at paragraph 160, where he said:

". . . [T]he correct approach to the analysis of the clubcard scheme . . . is to examine the entire cycle of transactions which it comprises, in order to determine objectively (that is to say without regard to the parties' subjective intentions, save in so far as they are reflected in the terms of the scheme), and having regard to the scheme's economic purpose, whether its legal effect is such that . . . vouchers issued under it are issued for 'consideration' in the Community law sense of the term."

There were no grounds, in Miss Sloane's submission, to displace the contractual analysis, for the instant case was not one where the totality of the evidence revealed something other than the contractual position; nor was it a case in which an objective determination of the economic purpose of the contract showed that the legal effect of the scheme was that the vouchers were given away free. Accordingly, she claimed that £16 of the £52 in each transaction in the voucher period was attributable to the Pleasureland face-value voucher. Mr Thomas in responding to Miss Sloane's third claim, contended that the evidence did reveal something other than the contractual position as explained by BPB: objective determination of the true contract's economic purpose showed that the vouchers were given away free; the vouchers were not supplied for consideration.

The Commissioners' first alternative position was that the supply of the Pleasureland voucher must in any event be treated as being for no consideration, in accordance with paragraph 7 of Schedule 10A of the 1994 Act. Miss Sloane acknowledged that that provision was designed to prevent businesses from manipulating the rules to reduce their tax liability, so that where a face-value voucher was sold as part of a package, and the price of the package was not adjustable where the customer refused the voucher, the voucher was to be treated as supplied for no consideration. She submitted that in BPB's case the price for the package was reduced from £52 to £36 if the customer refused the voucher: there was thus a significant difference in consideration within the meaning of paragraph 7. Consideration of £16 was properly attributable to the Pleasureland voucher on domestic and EU law principles, so that, in her further submission, paragraph 7 was not applicable.

Mr Thomas maintained that the Pleasureland vouchers were not face-value vouchers at all. The statutory provisions dealing with such vouchers defined them as applying to vouchers representing a right to receive goods or services to the value stated on the voucher. He contended that the provisions did not apply where, as in the instant case, the voucher itself related only to one specific supply, since the chargeability criteria for the tax were present and the potential for double taxation, ie the mischief aimed at by Schedule 10A, was absent.

Miss Sloane contended that the Commissioners' second alternative argument was also ill founded, submitting that the Pleasureland vouchers fell squarely within the definition of face-value voucher in paragraph 1 of Schedule 10A, they having been supplied for consideration and carrying a right to receive goods or services without the necessity for further payment.

In Mr Thomas's submission, the position as described by BPB had to be compared with the reality of the situation: apart from a tiny number of cases the consideration paid by a pair of customers was £52 for two Pleasure Beach wristbands, whether they received a voucher or not. The only genuine comparison that could be made in BPB's case was between the handful of customers who refused the voucher and the remainder, who, despite receiving it, did not know they were entitled to refuse it. He maintained that to read paragraph 7 of Schedule 10A in accordance with the amended terms and conditions was to ignore its tax avoidance purpose.

Conclusion

I am able to distinguish this case from the various voucher cases cited earlier for, whilst in each of them the voucher concerned was generally available and openly advertised, in the instant case:

(a) the terms and conditions of the Pleasureland voucher offer were not on display throughout the voucher period;

(b) the BPB voucher was offered only to selected pairs of customers visiting the Pleasure Beach;

(c) selection of participating customers was arbitrary, it being left to BPB's till operators to decide to whom the offer should be made;

(d) the voucher offer could be withdrawn whenever it suited BPB, and could similarly be re-instated ;

(e) BPB sought to conceal from its customers that a discounted price for a one day wristband was on offer (see paragraph 46 below); and

(f) BPB instructed its till operators not to offer a discounted wristband to pairs of customers unless they specifically asked for it.

I earlier found that the terms of the Pleasureland voucher offer as set out at paragraphs 7 and 8 of the amended terms and conditions were not on display throughout the voucher period. Indeed, BPB adduced no evidence to satisfy me that the amended terms and conditions were on display at any time during the voucher period other than on 13 August 2003. Accordingly, the only positive finding I am prepared to make in relation to the amended terms and conditions is that they were on display on 13 August 2003. The whole of my reasons for those findings, which I rely on in combination, are the six which follow. First, when Mr Wheeler paid an unannounced visit to the Pleasure Beach on 12 August 2003 he found no copies of the amended terms and conditions on display. Second, when Mr Wheeler and Mr Levy visited by arrangement on 13 August only some of the copies of the terms and conditions on display were in the amended form. If BPB was not prepared to ensure that the amended terms and conditions, and only those terms, were on display when Customs officers paid a pre-arranged visit specifically to deal with the voucher offer, in my judgment, it is most unlikely that it would have troubled to display them, or to ensure that they were on display, during the remainder of the voucher period. Third, in the whole of the voucher period a mere 5 of 4502 pairs of customers (0.0011 per cent) demanded discounted Pleasure Beach wristbands, and at least 2 of them demanded it post-payment. The two (or three) pairs may well have based their demands on the content of their receipts, as opposed to the terms and conditions. Fourth, had the availability of the discounted purchase price been genuine in the sense that it was widely and openly advertised and available, I have no doubt that many more than five pairs of customers would have taken advantage of it: its terms were too attractive for it to have been otherwise. (Indeed, the only real incentive to a customer to take advantage of the voucher offer was to obtain the discounted price: the voucher itself was effectively worth nothing, the actual cost of a single daily Pleasureland wristband being £16). That leads on to the fifth reason. Had the offer been openly advertised and available, those pairs of customers to whom it was not offered would surely have complained about being excepted from the opportunity of purchasing discounted tickets. In my judgment, BPB undoubtedly took all necessary steps to ensure that as few customers as possible knew of the availability of the discounted price. Sixth and last, the fewer the discounted wristbands purchased the greater the financial benefit to BPB: it was not in its interests to advertise the existence of the discounted wristband price.

I am unable to accept Miss Sloane's claim that the BPB scheme was wholly different from those schemes in which the courts have held there to be no consideration attributable to vouchers, the vouchers having been distributed free of charge. Nor do I accept her contentions that as a matter of contract consideration of £16 was attributable to the Pleasureland voucher, or that the contractual position would have to be disregarded in favour of an alternative analysis of the scheme based on the subjective intentions of the parties were I to conclude that no consideration was attributable to the Pleasureland vouchers. In each case my reason for rejection is that advanced by Mr Thomas.

I find that BPB did not fairly and reasonably bring to the attention of Pleasure Beach customers the availability of the discounted price of £36 for a pair of one day ride wristbands, and there was a real detriment involved in its failure to do so. Thus, in reliance on the judgment of Dillon LJ in the Interfoto case, I also find that amended conditions 7 and 8 never became part of the contract between BPB and those customers paying £52 for a pair of Pleasure Beach wristbands in the voucher period. Having regard to the whole transaction and looking at the Pleasureland voucher scheme objectively, as suggested by Mr Thomas, I hold that customers at the Pleasure Beach who paid £52 for a pair of one day wristbands paid for those wristbands and nothing else: there was no consideration for the Pleasureland vouchers issued by BPB. I dismiss the appeal.

In the event that I am wrong in so holding, I should add that I am satisfied that the vouchers provided by BPB were not face-value vouchers, my reason for so holding being that advanced by Mr Thomas. I also rely on his submissions for rejecting Miss Sloane's claim that the Pleasureland vouchers fall within the statutory definition of face-value vouchers.

Mr Thomas made application for the Commissioners' costs in the event of the appeal not succeeding. Miss Sloane resisted his application on the basis that BPB had not been informed that the Commissioners intended to allege that the Pleasureland voucher scheme was viewed as unacceptable tax avoidance, and that the appeal did not fall into that category of cases in which the Commissioners usually applied for costs. Having considered the matter most carefully, I have concluded that this appeal can truly be described as a substantial and complex one, so that I direct BPB to pay the Commissioners' costs.

DAVID DEMACK

CHAIRMAN
Release Date: 12 April 2005

MAN/04/0051