Time costs money

The taxpayer Leisure Pass Group sold the 'London Pass' to tourists. The pass entitled them to free entry to various attractions in London for a limited period. The taxpayer contracted with each attraction to allow the pass holder entry without further payment. For each entry the taxpayer paid a discounted fee to the attraction.

The issue was whether the taxpayer was liable to VAT on the receipts which it received on sales of passes or whether no VAT was due under VATA 1994 Sch 10A 'face-value vouchers'.

HMRC ruled that Sch 10A did not apply and that VAT at the standard rate was due on the sale of passes. The taxpayer appealed but the tribunal dismissed the appeal saying that the passes did not meet the definition of face-value vouchers.

Sir Andrew Park in the High Court said that in effect ...