The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
This guidance note looks at the scope of VAT relief for supplies of passenger transport made in the UK.
For the place of supply of passenger transport, see the Place of supply of services ― passenger transport guidance note.
For overviews of zero and reduced-rating respectively, see the Zero-rating ― overview and Overview ― items liable to VAT at the reduced rate guidance notes.
For in-depth commentary on the legislation and case law in this area, see De Voil Indirect Tax Service V4.251B and V4.422 for zero-rating and reduced-rating, respectively.
HMRC suggests that passenger transport services are supplied when a vehicle, ship or aircraft is provided together with a driver or crew, for the carriage of passengers. The supply of passenger transport can include ‘incidental services’ (see below in this guidance note).
The hire of a vehicle, ship or aircraft without crew is not seen by HMRC as a passenger transport service and is usually treated as the hire of a means of transport.
In one High Court case which was looking at whether the ‘Big Dipper’ fairground rise could be said to be passenger transport, the Court suggested that ‘the essence of the transport of passengers is the carriage of a passenger from A to B, and perhaps from B to C’.
The table below summarises examples given by HMRC of what is and is not passenger transport (although see later in this guidance note for whether these supplies qualify for either zero or reduced-rating):
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