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HMRC have published a consultation document on the likely operation of a reduced VAT rate of 5% for the transport of passengers by cable cars.
The new rate, introduced in the March Budget, will replace the standard 20% that currently applies,
Most cable-suspended transport systems carry fare-paying passengers from one point to another but do not benefit from the same VAT reliefs as most other forms of public transport. The aim of the new rate is to equalise the tax treatment as far as possible under EU law.
This change will take effect in 2013 and its impact will be evaluated after three years.
The Revenue's consultation seeks views on how the 5% rate should be implemented, the impact it may have, the administrative burdens to which it might give rise, and how its effectiveness should be evaluated.
Responses should be sent by email no later than 20 October.
