23 April 2025

JD Wetherspoon PLC v HMRC (TC/2022/12962) – judgment 17th April 2025

Following the Coronavirus lockdown, the Value Added Tax (Reduced Rate) (Hospitality and Tourism) (Coronavirus) Order 2020 introduced a reduced rate of VAT for restaurant and catering services, but excluded “alcoholic beverages”.  These were defined as beverages which were subject to excise duty as spirits, beer, wine or made–wine, but the definition did not refer expressly to supplies of cider. The taxpayer sought repayment of VAT on all supplies of cider on the basis that they ought to have been subject to the reduced rate.

The FTT has held that cider was not subject to the reduced rate of VAT because:

1. It could be abundantly sure that the purpose of the legislator was to include cider in the definition of “alcoholic beverage” and, by inadvertence, the draftsman failed to give effect to that purpose. Therefore, applying the principle in Inco Europe, the definition of “alcoholic beverages” should be read as including cider;
2. Had the legislation applied the reduced rate to cider but not any other alcoholic beverages then this would have been contrary to EU law, and therefore it would have been subject to a conforming construction adding a reference to cider into the definition of “alcoholic beverage”.

You can read the full judgment here.

Ben Elliott and Joshua Stevens acted for HMRC.