Supplies of passenger transport services (rules until 31 December 2020)

Produced by Tolley
Supplies of passenger transport services (rules until 31 December 2020)

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Supplies of passenger transport services (rules until 31 December 2020)
  • Introduction
  • What is passenger transport?
  • What can be treated as passenger transport?
  • What is not treated as passenger transport services?
  • Using crew who are not staff members
  • VAT treatment of passenger transportation services
  • What is the UK VAT treatment of transportation services?
  • How does a business determine the ‘place of supply’ for VAT purposes?
  • Overseas suppliers providing passenger transport services in the UK
  • More...

Introduction

This note provides an overview of the VAT treatment of passenger transport services. The following topics are covered within the scope of this guidance note:

  1. domestic and international passenger transport

  2. ancillary transport services

  3. restaurant and catering services on board ships, aircraft or trains during passenger transport

If the business is involved with providing advice on freight transport services, see the Supplies of freight transport services (rules until 31 December 2020) guidance note.

What is passenger transport?

From a VAT perspective, the provision of passenger transport services is the provision of a vehicle, ship or aircraft together with the staff and crew used for transporting passengers. Please note that if a ferry, train or other vehicle is used to transport the vehicle and its passengers, this will still be treated as the supply of passenger transportation services. For example, if a coach taking passengers from the UK to France uses a ferry to get across the channel, this is the provision of passenger transport services. Alternatively, if the coach is transported across the Channel and it has no passengers (except the driver), then this will be regarded as the transportation of freight.

Incidental services connected with the provision of passenger transport services can also be included (see below).

The hire of a vehicle, ship or aircraft without crew is not passenger transportation services and is usually treated as the hire of a means of transport. Please see the Hiring goods, e-services, telecommunication services and radio and broadcasting services (rules until 31 December 2020) guidance note for further information.

What can be treated as passenger transport?

According to HMRC, the list below are examples of what services can be viewed as passenger transport (this list is not exhaustive):

  1. pleasure cruises (see below)

  2. cliff lifts

  3. excursions by coach or train (including steam railways)

  4. horse drawn buses

  5. mystery coach or boat trips

  6. sightseeing tours

  7. the transport element of park and ride schemes designed to reduce traffic congestion in city centres, and

  8. the transport of

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