More than just status

Single or mixed supply for VAT on a membership package

The taxpayer offered a membership scheme mainly for owners of Harley-Davidson motor bikes which gave subscribers a package of benefits including a quarterly print magazine patches and pins a leather wallet membership card events guide and touring map access to dedicated websites and discounts at hotels and other third-party organisations.

HMRC considered the annual fee of £55 was wholly standard rated as a supply of membership. The taxpayer said a proportion of the fee should be treated as paying for zero-rated supplies such as the magazine.

After considering case law the First-tier Tribunal concluded this was a mixed supply. This was because ‘the “typical” member … places real value on the tangible items’ and would not join if these were not provided. Members joined the group for the individual benefits...