Bagel Nash Ltd (TC4279)
The taxpayer company sold bagels from a food court kiosk.
It began its business by accounting for output tax on the sales of takeaway cold items on the basis the food court was part of a larger outlet where customers would eat their purchases.
The firm later decided that zero-rating should apply because the court was not part of its kiosk, where food was not consumed. It submitted a claim for a VAT refund that HMRC refused.
The taxpayer appealed.
The First-tier Tribunal held that no food could be eaten in the kiosk because no customer could enter it – but in a commonsense view, the bagel bar included the food court for the purposes of VATA 1994, sch 8 group 1 note 3(a).
The taxpayer’s appeal was dismissed.
