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HMRC decided that classes run by the taxpayer, Weight Watchers, would be treated as a single supply of a weight loss programme, liable to VAT. The taxpayer appealed.
The issue was whether Weight Watchers customers, who attended weekly meetings at which they were weighed and supplied with handbooks and other printed materials, received a single standard-rated supply of a weight loss programme, or whether they received separate supplies of zero-rated printed material and standard-rated support services.
The tribunal said that there was a mixed supply at all meetings. HMRC appealed.
The High Court said that where two or more elements of a supply were so closely linked that they formed a single economic supply it would be artificial to split the supply. However, with regard to the weekly meetings, it was more accurate to view the meetings as a single supply of weight loss services.
The appeal was allowed in part.
