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The taxpayer provided a programme for rapid weight loss. The programme consisted of food packs, counselling and advice and this was sold by the taxpayer to counsellors, who then supplied their customers. Was this a single supply?
The taxpayer argued that there were two supplies, one of food and another of advice. This was overruled by the High Court. The taxpayer appealed.
The Court of Appeal held that transactions should not be artificially split into separate supplies where this did not reflect the economic reality of the transaction.
Here, from the customer’s perspective, the inclusion of the support services in the price of the food pack reflected the fact that both were integral to the customer’s requirements. The food packs and support services reinforced each other and it would be artificial to divide them.
The taxpayer’s appeal was dismissed.
