Weekly VAT News

Lucky Voice Group Limited: Application of temporary COVID-19 VAT reduced rate – FTT

Lucky Voice Group Limited operate karaoke rooms. The First-tier Tribunal has found that the reduced VAT rate of 5% that applied to certain attractions during the COVID-19 pandemic did not apply to the hire of private karaoke rooms by Lucky Voice. The reduced rate applied to supplies “of a right of admission to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas and exhibitions and similar cultural events and facilities” for the period from 15 July 2020 to 31 March 2022. The FTT concluded that the payment made by customers for use of private karaoke rooms was not made for ‘admission’; there was no shared collective enjoyment (which would ordinarily be associated with admission), and customers were receiving something over and above the right to access the private room, namely the exclusive use of the room and the equipment therein. The FTT also found that the supply of private karaoke rooms was not similar to the other attractions listed as subject to the reduced rate, noting that the finding might have been different if the supply had been of public karaoke. The FTT also rejected Lucky Voice’s arguments regarding fiscal neutrality and unfairness. The FTT dismissed Lucky Voice’s appeal against HMRC’s decision that the reduced rate did not apply. (Contact: Donna Baker)

Virgin Atlantic Airways Limited: VAT and loyalty points – application for a stay in proceedings – FTT

Virgin Atlantic Airways Limited (Virgin) appealed HMRC assessments relating to the VAT treatment of Virgin’s loyalty points, in particular, the transactions and payments between Virgin and ‘earn partners’ (that is, the businesses from which loyalty members can purchase goods/services to receive points). Following an application from HMRC, the First-tier Tribunal has directed that Virgin’s case should be stayed behind the appeal of Avios Group (AGL) Limited, which concerns the VAT treatment of loyalty points. The FTT considered that there is “very considerable similarity” between Virgin and Avios, and overlap between the legal issues raised in the appeals. The FTT concluded that the final determination of the Avios appeal “will materially assist” in resolving the issues in Virgin’s appeal. The FTT also considered that the assistance provided by the resolution of the Avios appeal would outweigh the potential cost of any delay caused by a stay. The FTT granted HMRC’s application for a stay in proceedings. (Contact: Donna Huggard)

Deloitte Global Tax Policy Survey

Deloitte’s 2026 Global Tax Policy Survey is now available. The survey draws on insights from more than 1,000 tax and finance leaders across 28 jurisdictions, to illustrate where complexity is intensifying, where policy is shifting, and what that means for businesses today. The message of the survey is that the biggest tax policy challenge facing global tax and finance leaders is rising compliance burdens and complexity. This is shaping operating models, investment locations, and technology infrastructure.