WM Morrison Supermarkets Ltd v Revenue & Customs

VAT � supply of disposable barbecues � whether VAT chargeable at a reduced rate on the charcoal element of the supply � reduced rate of VAT on solid fuel pursuant to Schedule 7A Group 1 Item 1(a) VATA 1994 � Commission v France Case C-94/09 considered � interaction with Card Protection Plan v C & E Case C-349/96 considered � significance of charcoal being a concrete and specific aspect of the supply � appeal dismissed

Mr David Scorey of counsel instructed by PricewaterhouseCoopers Legal LLP for the Appellant

Mr Richard Chapman of counsel instructed by the General Counsel and Solicitor to HM Revenue and Customs for the Respondents

The appellant is a well known supermarket chain. In the course of business it sells what are known as �disposable barbecues�. This appeal concerns the liability to output tax on sale of such barbecues. Put briefly, the appellant contends that a reduced rate of VAT is payable on the sale of the charcoal element of the supply with the remainder of the supply being subject to the standard rate. The respondents contend that the whole supply is subject to the standard rate.

There is no dispute as to the underlying facts. The barbecues in question comprise a rectangular foil tray which contains charcoal and lighting paper and is covered by a metal grill. As the name implies, they are designed to be disposed of after a single use. We need say little more about the facts which are deceptively simple. The real issue between the parties is how established legal principles apply in determining the rate of VAT on the barbecues.