United Kingdom VAT & Duties Tribunals Decisions

 


Pret A Manger (Europe) Ltd v Revenue & Customs [2006] UKVAT V19755 (11 May 2006)

19755

VALUE ADDED TAX — zero-rating — supplies of cold food from outlets within larger building — VATA 1994, Sch 8 Group 1 Item 1 — whether supplies made "in the course of catering" — meaning of "catering" — supplies not made in the course of catering — whether food to be consumed "on the premises" — Note (3) to Item — food not consumed on premises of supply — appeal allowed

LONDON TRIBUNAL CENTRE LON/2004/0903

PRET A MANGER (EUROPE) Ltd Appellant

- and -

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: Adrian Shipwright (Chairman)

Mrs Penny Jonas

Sitting in public in London on 5 and 6 May 2005 and 10 and 11 November 2005

Andrew Young, Counsel for the Appellant

Angus Edwards, Counsel instructed by the Acting Solicitor for HM Revenue and Customs, for the Respondents

© CROWN COPYRIGHT 2005

DECISION

Introduction

1. Pret a Manger (Europe) Ltd ("Pret") appeals against a refusal by HM Revenue and Customs ("HMRC") to accept and process a VAT repayment claim for some £800,000 paid to HMRC by Pret on the basis that certain supplies were standard-rated which Pret argues should have been zero-rated. The decision appealed against is contained in a letter dated 17 December 2003.

The Issue

2. The essential question at issue in this case is whether supplies of cold food (such as prepacked ready-made sandwiches and fruit) are zero-rated as supplies of food or are standard-rated as supplies of catering in the particular circumstances. This raises two further points:

(1) Was there a supply of catering per se? and

(2) Was there a supply of catering within the extended meaning given in Note (3)(a)?

The Law

3. The provisions relating to food and catering are found in Group 1 of Schedule 8 Value Added Tax Act ("VATA"). The broad effect is that food is to be zero-rated except as otherwise provided when presumably it is standard rated. This Group provides insofar as is relevant:

"The supply of anything comprised in the general items set out below, except—

(a) a supply in the course of catering; and

(b) a supply of anything comprised in any of the excepted items set out below, …

General items

Item No

1 Food of a kind used for human consumption …

Excepted items

…

2 Confectionery …

NOTES

(1) 'Food' includes drink …

(3) A supply of anything in the course of catering includes—

(a) any supply of it for consumption on the premises on which it is supplied; and

(b) any supply of hot food for consumption off those premises …"

The Authorities

4. A bundle of authorities was produced. This contained the following items.

Customs & Excise v B H Cope [1981] STC 532

R v Customs & Excise Ex P Sims [1988] STC 210

Travellers Fare Limited v Customs & Excise, Trib ref 13482

Armstrong v Customs & Excise (1984) VATTR 53

Bishop & P Elcocks v Customs & Excise, Trib ref 17620

E & g Catering Services Ltd v Customs & Excise, Trib ref 15,552

Fresh Seafoods Barry Ltd (1991) VATTR 317

Ashby Catering v Customs & Excise, Trib ref 4220

Whitbread plc v Customs & Excise, Trib ref 18,706

Whitbread Group plc v Customs & Excise [2005] All ER 396

Robert Ross v Ryanair Ltd 2002 CL209468

Robert Ross v Ryanair [2004] EWCA Civ 1751

Faabor-Gelting Linien A/S v Finanzamt Flensburg (C-231/94) [1996]

Bristol City FC v Customs & Excise, Trib ref 164

Skilton & Gregory v Customs & Excise, Trib ref 11723

Customs & Excise v Safeway Stores plc 1997 STC 163

Compass Contract Services UK Ltd v Customs & Excise, Trib ref 19053

Blasi v Finanzamt Munchen [1998] STC 336 (C-346/95)

SUFA v Staatssecretaris van Financien (C 348/87)

5. The most useful authority was Compass on which we rely below. We adopt its analysis. We have read and considered the other authorities carefully. We have concluded that we agree with the analysis of the cases in Compass and feel it unnecessary and not helpful to repeat this analysis in detail. We find the other Tribunal cases useful illustrations but ones which depend on their own particular facts (cf Peter Smith J in Whitbread at paragraph 20).

Evidence

6. Oral evidence was given by Jonathan Paul Hemens, Pret's internal auditor and by Terry Parkinson, a VAT partner with Haines Watts. A witness statement was provided for Mr Hemens.
7. An agreed bundle of documents was produced. It was admitted as evidence.
8. A site visit was arranged to Terminal 4 at Heathrow and the Folkestone Channel Tunnel Terminal. This was attended by the Tribunal and representatives of both parties. This occupied the first day of the hearing. We found this most useful in reaching our decision as it enabled us to see the particular setting and context. It seems this was not an advantage that others have had in reaching their decision.
9. This appeal also concerned supplies made at Terminal 1 at Heathrow. The parties have agreed to treat the two Heathrow sites as identical in all respects. Hence no site visit was made to Terminal 1 at Heathrow.

Finding of Facts

10. From the evidence (including the site visit) we make the following findings of fact.
11. Pret – General Matters

(a) Pret carries on business selling sandwiches, fruit, yoghurt, pastries and some fast food as well as coffee, tea and soup. This case is only concerned with cold food such as sandwiches and fruit (references to sandwiches in this decision, where appropriate, include all the cold food items in question here).

(b) Customers can consume their purchases from Pret in areas controlled by Pret or take them away to eat.

(c) Customers select the items of the type this case is concerned with which they wish to purchase from the cold cabinets and displays in the retail outlet and take them to the till to pay for them.

(d) At the till customers were asked whether the items are for consumption on the premises or not. If the items are for consumption on the premises they will be put on a tray. If they are for consumption off the premises they will be packed into a convenient bag. A paper napkin or serviette will be provided in either case.

(e) Seating areas are provided by Pret for "on consumption".

(f) The flooring of these areas tends to match that in the selling area and the snack area is designated in some way by the flooring (eg. pink tiles in some cases such as Terminal 4 at Heathrow).

(g) Neither the unit at Heathrow nor at Folkestone could itself be locked but the display cabinets seem to be capable of being closed and/or being cleared. Access to theses areas could be restricted though and persons asked to leave.

(h) The branding of the units clearly showed that they were occupied by Pret and were clearly under Pret's control and not the licensor or lessor's control.

12. Pret – Heathrow

(a) The unit in question at Heathrow is "Airside". It is a unit within the complex of retailing units in the Departure Lounge in Terminal 4 where people can wait before being called to the relevant Gate for the departure of their particular flight.

(b) This is in an area after the manned barrier at which one has to show one's boarding pass and passport but before the Departure Gates which lead to the aircraft. As well as passengers other people have access to this area. It is called "Airside" to distinguish it from the "Landside", ie the area before the passport control manned barrier.

(c) Various people such as maintenance workers, officers of HM Revenue and Customs, retail workers and others have access to Airside (where the Pret premises in question are) and so could take advantage of the Pret facility.

(d) The unit in question at Terminal 4 consists of a retail area with the till towards the back of the unit. There are display units and cabinets from which the customers select their food. There is a separate designated sitting area with tables and chairs at which the food can be consumed. The area is edged by pink tiles which show its extent.

(e) People who sat in the seating area without having made a purchase from Pret could be asked to move if Pret was busy.

(f) The occupation of the retail unit and the eating area are the subject of an agreement with BAA. This agreement provides for Pret to occupy the retail area and the seating area. This is done for payment which is to be calculated on a turnover or royalty basis. Hence the agreement provides for prices to be in line with certain other sites and for the Heathrow sites to be open between particular times. These seem to us likely to be included because of the turnover calculation to provide a "floor".

(g) The agreement also provided for Pret to keep its unit tidy and to remove rubbish etc. Provision was also included that Pret should stop its rubbish etc from overflowing into the Departure Lounge. This does not give Pret control over the Departure Lounge.

(h) We find as a basic fact that there was no joint-venture or partnership or similar arrangement between Pret and BAA. We further find that the Pret retail unit and seating area were separate premises from the Departure Lounge. We are able to do this because of observations made during our site visit.

(i) We also find that the premises in question at Heathrow on which the supply was made by Pret were the retail unit and seating area and that supplies for consumption outside the retail unit and seating area were not supplies of food for consumption on the premises on which it (ie the food etc) is supplied. Those premises were neither Airside nor the Departure Lounge.

(j) We find that there was no common purpose to which the food supplied at Heathrow was linked. We consider that the passengers all have various reasons and purposes for travelling. Travel was ancillary to those purposes. No evidence showing common purpose was led by either party. We consider it probable that if a traveller were asked what their purpose in being at Heathrow was they were likely to answer to enable them to catch a plane so as to enable them to carry out their main purpose such as a business meeting or a holiday. This is not the same as the common purpose of attending a wedding or party to celebrate a marriage or some other particular event.

(k) The supplies here were to individuals to meet their need for sustenance. They were not part of some larger experience or enjoyment of the airport or terminal or of travel to be shared with others.

13. For the sake of clarity we make the following findings the basic fact:

i. Sale of sandwiches not service(s)

What was sold and bought here were sandwiches and other cold food. There was no element of service involved in what Pret did in respect of items sold which were not for consumption on the premises. We find that there was a sale of goods and not a supply of services.

ii. Having visited clear premises Pret's area and not Airside

Having had the benefit of the site visit we find that the premises in question at Heathrow were those premises over which Pret had control. In other words, the premises were the retail unit and the relevant seating area. This was clear to us as a result of the site visit. The branding and delineation showed this to be clearly the case when conducting the viewing. It could not be said that the premises were the whole of Airside or the Departure Lounge in considering whether the food was consumed on the premises on which the food was supplied which we find was the area under Pret's control.

iii. Takeaway supplies unless for purpose of on consumption

We find as a basic fact that all supplies other than those where the customer stated that they were for on consumption were takeaway supplies of goods. Accordingly, they were not supplies of catering in its ordinary meaning or on the extended meaning given in Note (3) but supplies of goods namely the sandwiches and other cold foods.

iv. For the sake of completeness we find in addition that on the balance of probabilities those purchasers who turned right out of the retail unit towards the Gates were proceeding with their purchasers to the aircraft (cf Peter Smith J in Whitbread at para 23).

14. Pret – Folkestone

(a) The arrangement at Folkestone was similar to that at Heathrow. There was a retail area with a designated seating area indicated by the particular flooring. This was in an area with signs saying 'Food Court and other food vendors'.

(b) The seating areas for the Food Court were such that it could be more convenient for customers to sit in area for which other food vendors were responsible. However, neither party, they told us, wished to take any point on this.

(c) The Pret unit in the Food Court was in a facility which could only be accessed by car. There was a barrier at which the relevant ticket had to be shown before entering the Channel Tunnel complex. Tickets were issued for the car rather than for the individual passengers.

(d) The car could then proceed to the train but more usually would be directed to the waiting area where cars could be parked to wait to be called for to take the train they were booked on. There was a separate passport control on the way to the train.

(e) The facility in which the Food Court is contained is adjoining the waiting area where cars can be parked.

(f) The lease under which Pret occupied its unit provided for a turnover or royalty rent. It had similar provisions concerning base prices and opening hours to those in the Heathrow document (see above).

(g) We find as a basic fact that there was no joint-venture or partnership or similar arrangement between Pret and the landlord at Folkestone. We further find that the Pret retail unit and seating area were separate premises from the Food Court. We are able to do this because of observations made during our site visit.

(h) We also find that the premises in question at Folkestone on which the supplies were made by Pret were the retail unit and seating area and that supplies for consumption outside the retail unit and seating area were not supplies of food for consumption on the premises on which it (ie the food etc) is supplied. Those premises were not the Food Court nor the Folkestone facility in which it was situate nor the Channel Tunnel facility itself. We also find that a car would not be part of the premises so that sandwiches consumed in a car would be consumed off and not on the premises.

(i) We find that there was no common purpose to which the food supplied at Folkestone was linked. We consider that the passengers all have various reasons and purposes for travelling. Travel was ancillary to those purposes. No evidence showing common purpose was led by either party. We consider it probable that if a traveller were asked what their purpose in being at the Channel Tunnel they were likely to answer to enable them to catch a train to enable them to carry out their main purpose such as a holiday. This is not the same as the common purpose of attending a wedding or party to celebrate a marriage or some other particular event.

(j) The supplies here were to individuals to meet their need for sustenance. They were not part of some larger experience or enjoyment of the Food Court or the Facility or of travel to be shared with others.

15. For the sake of clarity we make the following findings the basic fact:

i. Sale of sandwiches not service(s)

What was sold and bought here were sandwiches and other cold food. There was no element of service involved in what Pret did in respect of items sold which were not for consumption on the premises. We find that there was a sale of goods and not a supply of services.

ii. Having visited clear premises Pret's area and not Airside

Having had the benefit of the site visit we find that the premises in question at Folkestone were those premises over which Pret had control. In other words, the premises were the retail unit and the relevant seating area. This was clear to us as a result of the site visit. The branding and delineation showed this to be clearly the case when conducting the viewing. It could not be said that the premises were the Food Court or the whole of the facility in considering whether the food was consumed on the premises on which the food was supplied which we find was the area under Pret's control.

iii. Takeaway supplies unless for purpose of on consumption

We find as a basic fact that all supplies other than those where the customer stated that they were for on consumption were takeaway supplies of goods. Accordingly, they were not supplies of catering in its ordinary meaning or on the extended meaning given in Note (3) but supplies of goods namely the sandwiches and other cold foods.

iv. For the sake of completeness we find in addition that sandwiches for consumption outside the Food Court were for consumption off the premises and not on the premises. We also find that a car in the car park is not part of the same premises in fact.

The Parties Contentions

Pret's Contentions

16. In essence Pret's contentions were:

(a) What was involved here was a supply of goods, no supply of service or of services was involved.

(b) There was no supply of "catering" in the ordinary meaning of the word. This would generally involve something in the nature of service. An indication may be that a tip may be given for what was done.

(c) The fact that one had to show a boarding pass or ticket to get past a barrier did not turn the supply of goods into a supply of catering. Reliance was placed particularly on E&G Catering (Airside Van) and Bishop (Culdrose) to support this.

(d) The full facts and circumstances of each case need to be considered. Here, the travellers had varying purposes, some to go to a particular place somewhat passengers in transit. There was no common purpose to which the supply of food was linked.

(e) The Cope case had to be placed in the context of its own facts. Here there was no "common purpose" as there was no sporting or social occasion.

(f) This case is only concerned with the sandwiches that are taken away from the unit. It is accepted that the sandwiches etc put on a tray for "on-consumption" are standard rated. However, those put into bags are for consumption "off the premises". Note (3)(a) has no application here.

(g) The premises here are the retail unit and the designated eating area. It would be absurd to treat the whole of Airside as the premises. In E&G Catering the van was the premises. Here it was the retail unit and designated seating area.

(h) As far as Folkestone was concerned the car could be considered to be separate from the premises even on the wider construction of premises.

(i) In the same way that RNAS Culdrose was not the premises but the licensed area was in Bishop so here, a fortiori, Airside was not the premises.

(j) The Whitbread case was distinguishable on the facts. No evidence as to takeaway was led in that case. As Peter Smith J said in that case:

"[23] It follows therefore that on the evidence that was before the tribunal the appeal will be dismissed. That does not however preclude the possibility of [Diagram or picture not reproduced in HTML version - see original .rtf file to view diagram or picture]Whitbread, if it has evidence which is accepted by the commissioners in respect of travellers (who do not eat on the premises (ie the departure lounge), but only on the aircraft) and members of staff with concessionary cards who also neither eat within the concessionary area or within the airside area of the departure lounge should be subject to a zero-rate in respect of these particular classes of goods".

Here there was such evidence.

HMRC's Contentions

17. In essence HMRC's contentions were:

(a) There was a supply of catering per se in this case.

(b) There was a restriction on who could be Airside. Only those with a boarding pass or other clearance could be Airside. The travellers also had a common purpose of travel.

(c) The whole of the circumstances including control of Airside showed that there was a "joint-venture" between Pret and BAA. This meant that the premises in question are the whole of the Departure Lounge/Airside. Accordingly, the requirements of Note (3) (a) are also fulfilled deeming there to be a supply of catering.

(d) The Whitbread case is not distinguishable and must be followed.

(e) The same essential position prevailed at Folkestone where the premises were the whole of the facility.

(f) In both cases supplies made by Pret from units beyond the barrier were in area that is restricted to travellers and others with the right passes and so the requirements of Cope as to catering were fulfilled. Safeways did not help.

(g) Accordingly, the repayments have been correctly refused.

Discussion

General

18. There are two issues which we have to decide. First, was there a supply of catering in the ordinary meaning of the word or a supply of goods ("the Goods or Catering Point"). Secondly, is there a supply for consumption on the premises within the meaning of Note (3)(a) ("The Premises Point") It is common ground that what is involved here is food fit for human consumption.

The Goods or Catering Point

Goods?

19. A supply of cold food is prima facie a supply of goods. Accordingly, our starting point is that the supply of cold food such as a packet of sandwiches is a supply of goods. Thus a supply of a packet of sandwiches Landside with nothing more is a zero-rated supply. This is accepted by HMRC. The issue is whether the supply Airside turns the supply into a supply of catering in the ordinary meaning of the word (cf Peter Smith J in Whitbread at para 21).

Case Law

20. The case law tells that the word "catering" is to be given its ordinary and natural meaning. Whether or not something is catering is a matter of fact and degree. The case law makes it plain that there is no definition of "catering" and that it would be unhelpful to seek to provide one. It is something one knows when one sees it.
21. The starting point in considering the ordinary meaning of catering is the Cope case. We have carefully considered this case and the other cases referred to above.
22. From the case law we draw the following principles:

(a) The word "Catering" is to be given its ordinary meaning;

(b) Catering often involves service and provision of glasses and cutlery for a time;

(c) Restricted access can be an indication of catering but it is not conclusive of the matter. It depends on the particular circumstances;

(d) Where there is a link or nexus between the supply of food and the function or activity to which access is restricted this may be an indication of catering. However, it is not conclusive as the Bishop case involving RNAS Culdrose shows and of even more relevance in this context E&G Catering. If the food is ancillary or incidental to the main function it is likely to be catering (eg a wedding reception).

(e) It is a question of fact and degree in every case. Each case depends on its own facts (cf Peter Smith J in Whitbread at paras 18 and 19).

Catering

23. This is not defined in the statute though its general meaning has been extended. We consider that the proper approach is to ask whether an ordinary person would recognise what is done here as catering? We apply the test "would the ordinary person regard what was being done as being 'in the course of catering'"?
24. We draw support for this approach from what Keen J said in the Safeway case. He said (at pages 168-169):

"As was said by the tribunal in the case of Armstrong v Customs and Excise Comrs [1984] VATTR 53 at 62: 'Taking the word in its ordinary and popular meaning, we think an ordinary person can recognise catering when he sees it.' I regard that as being an appropriate definition, in so far as one can be given, of the meaning of that phrase 'in the course of catering'. The tribunal in the Armstrong decision went on to refer to the decision of Sir Douglas Frank QC, sitting as a deputy High Court judge, in the case of Customs and Excise Comrs v Cope [1981] STC 532. In the course of that judgment Sir Douglas Frank QC referred (at 538) to a popular meaning of the word 'catering' as being—

'… the provision of food incidental to some other activity, usually of a sporting, business, entertainment or social character. Thus, it covers food supplied at football matches, race meetings, wedding receptions, exhibitions and theatres.'

...
   In my judgment whether a particular supply is 'in the course of catering' is a matter of fact and degree. There will be a range of factors to be taken into account by the body which is making the decision. Those factors would seem to me to include such matters as whether the food is indeed supplied in connection with an occasion or other event; the degree of preparation which remains to be carried out by the recipient is likely to be a relevant consideration, as is the presentation of the food itself—in other words, is the food in a form where one would ordinarily put it on the table with no further steps being taken? One would want to bear in mind whether crockery and cutlery are provided along with the food itself and any other of the usual ancillary items which go with a meal. Whether it is delivered, or not, by the supplier may often be a highly material factor. Whether it is served by the supplier to those eating it, at the place where consumption occurs, will also be a relevant factor.
   I do not propose to list any more factors. The ones I have listed are not intended to be exhaustive. I recognise there may well be other considerations which will arise in the individual case. I share the tribunal's view in this appeal that no one factor by itself is likely to be decisive and it would be wrong for the tribunal to focus upon one factor in any case to the exclusion of all others. These are decisions to be made in the round, taking account of all considerations of the kind to which I have referred.
   The test itself has to be an objective one: would the ordinary person regard what was being done as being 'in the course of catering'?"

25. We do not consider that this is necessarily inconsistent with the overall approach taken in Cope. To the extent that it is we prefer the approach in the later High Court case, Safeway, as Mr Bishopp does in Compass. The various cases cited to us are useful illustrations but are not determinative of this case. We might or might not have reached the same result as those cases but they were within the range of possible reasonable decisions that the Tribunal could reach.
26. In considering Keen J's non-exhaustive list of factors we reached the following conclusions:

(a) The sandwiches are not supplied in connection with an occasion or other event.

(b) Although the degree of preparation which remains to be carried out by the recipient is merely to take the sandwich out of the wrapping and eat it we do not consider that this is any different from buying a sandwich Landside which is not treated as catering.

(c) The presentation of the food itself Airside is no different from that Landside which is not treated as catering.

(d) Crockery is not provided and such cutlery as is provided along with the food itself is disposable and does not have the element of bailment for temporary use of a metal knife or fork supplied at a wedding reception or party.

(e) The sandwiches in question were not delivered but handed back to the customer at the till, having been put in a bag.

(f) The sandwiches were not served by the supplier to those eating it, at the place where consumption occurs in respect of the items in issue here. There was no waitress or silver service. A sandwich, in the circumstances under consideration, was sold for consumption outside the area under the control of Pret.

27. These factors are not exhaustive and so we ask ourselves the further question "Would the ordinary person regard what was being done as being 'in the course of catering'?"
28. In our view the ordinary person would clearly not regard the sale of sandwich for consumption outside the area under Pret's control as being catering when done Airside anymore than the ordinary person would consider it catering if done Landside. In both cases they would consider it not to be catering and we so find as a fact. This is also true of the Channel Tunnel. We find as a fact that the ordinary person would not consider the supply there as being catering.
29. Accordingly, we decide that there was no 'catering per se' involved here. For the avoidance of doubt we record that we would reach the same conclusion applying the popular meaning in Cope if that is a different test. We find as a fact that what was in issue here was not "… the provision of food incidental to some other activity, usually of a sporting, business, entertainment or social character." What is in issue here is not equivalent to "…food supplied at football matches, race meetings, wedding receptions, exhibitions and theatres".
30. The supplies here were to individuals to meet their need for sustenance. They were not part of some larger experience or enjoyment of the airport or terminal or of travel to be shared with others.
31. Applying that to the factual situation here we consider that no supply of catering in the ordinary meaning of the word is involved here. This is because:

(a) This case is only concerned with food taken away from the retail unit and not consumed on the premises

(b) We have found as primary facts

(i) On the evidence before us no ordinary person would consider that there was a supply of catering in the ordinary meaning of the word.

(ii) There is no element of service in what is done.

(iii) There is no common purpose here as there is at a sporting or social function.

(iv) There is no nexus of the requisite type between the sandwiches and presence at Terminal 4 or the Channel Tunnel Facility.

(v) The supplies here were to individuals to meet their need for sustenance. They were not part of some larger experience or enjoyment of Terminal 4 or the Channel Tunnel Facility or of travel to be shared with others.

The Premises Point

32. Again the case law tells that what constitutes the premises is a matter of fact in the particular context and depends on the evidence. As Peter Smith J said in Whitbread at para 19:

"It seems to me that for the purpose of note (3) premises from which the catering services are provided is also a question of fact and degree".

33. He continued at para 22:

"The determination of the premises in each case is a question of fact. I do not see that the tribunal decision to determine that the whole of the departure area are premises can be faulted. Indeed it accords with my own view".

34. The judge's opinion as to the extent of the premises is of course a matter we take great note of especially as the premises he was concerned with were close to Pret in Terminal 4. However, we are not bound by it particularly where different (and seemingly fuller) evidence has been led and we have had the benefit of a site visit.
35. The learned judge makes it clear that the Whitbread case depended on the particular evidence and findings of fact in the case some of which were fuller than others. As regards premises, Whitbread is a case where "the judge merely accepted that the tribunal's finding on this issue was one which it could reasonably reach on the facts, without adding any analysis of his own" (Compass para 98).
36. The case law is reviewed in detail in the Compass case. We adopt that review and analysis.
37. In particular we adopt paragraph 99 of Compass where it is said:

"From those cases it is apparent that whether anything constitutes premises is a question to be answered by reference solely to the facts of the individual case. Though the word "premises" implies, I think, some kind of structure, that structure need not (as in Whieldon Sanitary Potteries) have four walls and a roof and (as in Bedale Auction and Sims) it may be contained within other premises. Sims also indicates that the occupier's sphere of control is a material consideration".

38. On the evidence before us we find as a primary fact that the premises in the context of the Pret business at Terminal 4 and Folkestone in relation to the supplies in question are the retail unit and the designated seating area over which Pret, the supplier, had control and not Airside or the whole of the facility.
39. A Discrimination Point was also raised in argument which in the light of our findings does not arise and so do not decide it. For completeness sake we would record though that provided all the like businesses are treated alike in Terminal 4 or in the facility at Folkestone we do not see that there is any discrimination.

Conclusion

40. On the basis of our findings of fact that:

(a) there is no supply of catering within the ordinary meaning of that word; and

(b) that the premises are the retail unit and the designated area we hold that the supplies in question are supplies of food fit for human consumption and not of catering within Group 1 Schedule 8 VATA including its extension by Note (3)(a).

Accordingly, the appeal is allowed.

41. In accordance with rule 30A of the Value Added Tax Tribunals Rules 1986 (SI 1986/590), we give the parties permission, if they wish, to appeal direct to the Court of Appeal. We certify, pursuant to Article 2(b) of the Value Added Tax Tribunals Appeals Order 1986 (SI 1986/2288), that this decision involves a point of law relating wholly or mainly to the construction of an enactment which has been fully argued before us and fully considered by us.
42. In the circumstances we consider that the Appellant should be entitled to their costs.

ADRIAN SHIPWRIGHT

CHAIRMAN

RELEASE DATE: 11 May 2006

LON/2004.0903