Lift skiing facilities are subject to the 5% reduced rate of VAT


Paul Cochrane

Paul Cochrane

Tax Director

10 February 2020


In a recent win for Johnston Carmichael client Snow Factor Limited, the VAT and duties Upper Tribunal has allowed our client’s appeal and decided that the reduced VAT rate of 5% applies to income from lift passes sold for indoor skiing and snowboarding. HMRC already accept that lift passes at Scotland’s outdoor ski resorts are subject to 5% VAT.

The reduced rate of VAT applies to services consisting of: 'transport of passengers by means of a cable-suspended chair, bar, gondola or similar vehicle', designed for nine people or fewer. HMRC opposed Snow Factor’s use of the 5% rate saying instead that what Snow Factor provide is a right of admission which is subject to 20% VAT.

On the facts, the Tribunal found that skiing customers had to pay if they wanted to use the ski lift but could come onto the slope, walk up and ski down as often as they wanted to for free. The fact that very few people ever did so was neither here nor there.  

As there was no payment required to enter the premises, or indeed to ski, there was no ‘supply’ of admission. It followed that the only thing which Snow Factor ‘supplied’ was use of the ski lift and so the 5% rate applied.

Any business which operates a transport system which is similar in nature to a ski lift should consider whether this ruling can apply to them. 

VAT exempt not-for-profit ski clubs which currently pay no VAT on membership income or claim any VAT on costs, should also consider the implications of the decision, which may prove particularly useful for any clubs currently planning to improve their facilities or undertake any other form of capital expenditure.

For further information or if you think this would benefit you, please get in touch with Paul Cochrane or a member of our VAT & Duty team.