JD Wetherspoon PLC v Revenue and Customs (application of reduced rate to supplies of cider in the course of restaurant and catering services - whether cider fell within the exclusion) [2025] UKFTT 658 (TC) (03 June 2025)

JD Wetherspoon PLC v Revenue and Customs (application of reduced rate to supplies of cider in the course of restaurant and catering services - whether cider fell within the exclusion) [2025] UKFTT 658 (TC) (03 June 2025)

The Tribunal held that, on a strict reading, the statutory definition of 'alcoholic beverage' in Group 14 did not include cider. However, the conditions for applying the Inco principle were satisfied: there was an obvious drafting error, the legislative intention was clear from the context and materials, and the correction was necessary to give effect to that intention. Therefore, cider should be read into the definition and excluded from the reduced rate. Even if the Inco principle did not apply, EU law (specifically the PVD and fiscal neutrality) required a conforming interpretation to the same effect. The appeal was dismissed.

Citation
[2025] UKFTT 658
Parties
Appellant: JD Wetherspoon PLC; Respondents: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
03 June 2025
Procedural Posture
VAT Appeal (first Tier Tribunal, Tax Chamber) / Preliminary Issue Determination
Outcome
Appeal dismissed
Legal Topics
Value Added Tax, Reduced Rate Application, Alcoholic Beverages Definition, Statutory Construction, EU Fiscal Neutrality
Tax Law Statutory Interpretation European Union Law Value Added Tax Reduced Rate Application Alcoholic Beverages Definition Statutory Construction EU Fiscal Neutrality

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Parties

JD Wetherspoon PLC

Appellant

The Commissioners for His Majesty's Revenue and Customs

Respondents

Procedural Posture

VAT Appeal (first Tier Tribunal, Tax Chamber) / Preliminary Issue Determination

Legal Issues

  1. 1 Whether cider was excluded from the reduced rate of VAT for supplies in the course of restaurant and catering services under Group 14 of Schedule 7A to the Value Added Tax Act 1994 during the Relevant Period.
  2. 2 Whether the statutory definition of 'alcoholic beverage' in Group 14 could be construed to include cider under UK domestic law.
  3. 3 Whether the Inco principle for correcting obvious legislative errors applied to require insertion of cider into the definition.

Ratio Decidendi

The Tribunal held that, on a strict reading, the statutory definition of 'alcoholic beverage' in Group 14 did not include cider. However, the conditions for applying the Inco principle were satisfied: there was an obvious drafting error, the legislative intention was clear from the context and materials, and the correction was necessary to give effect to that intention. Therefore, cider should be read into the definition and excluded from the reduced rate. Even if the Inco principle did not apply, EU law (specifically the PVD and fiscal neutrality) required a conforming interpretation to the same effect. The appeal was dismissed.

Court Disposition

Appeal dismissed

Orders

  • Cider is to be treated as excluded from the reduced rate of VAT for the Relevant Period under Group 14 of Schedule 7A to the Value Added Tax Act 1994.
  • No repayment of VAT is due to the Appellant in respect of supplies of cider during the Relevant Period.