TC09528 - [2025] UKFTT 00564 (TC)

Ingliston was formed in October 2019, and Mr Hayes is its director. Its business is providing members of the public with the opportunity to drive a range of “supercars” at off-road venues. It provides its services by holding “event days”, at a frequency of approximately five to six per month.

Ingliston sells vouchers to customers on its website, and directly on event days. These “own sales” account for around 80-90% of Ingliston’s business, with the remainder of voucher sales being made on third party websites. The vouchers are redeemed on Ingliston’s website, at which point the customer chooses a venue, a vehicle, and any add-ons such as a ride in a four-seater. Customers can also choose to buy insurance at this point. A customer who has redeemed their voucher then receives a ticket.

A significant proportion of Ingliston’s sales are made on event days, either to pre-booked customers who choose to buy additional driving experiences, or to people who may have intended only to watch a friend or family member but who decide on the day to participate themselves.

Ingliston owns a total of 18 cars which it moves between three different venues, two in Scotland and one in Northern Ireland, operating from only one of these venues at a time. The venues are a rally and go-kart track, a former race circuit, and a current race circuit. The circuits do not resemble public highways in that they are one way and have fewer visual markers, for instance they do not have kerbs, lamp posts or traffic lights.

Of Ingliston’s 18 cars, 16 are two-seaters and two are four-seaters. The four-seaters are BMW M3s (the “M3s”). While an event day is in progress, the number of cars that will be driving at the same time varies: on occasion all 18 might be driving at once, but the average is around 12 at any one time.

Customers can choose either to drive themselves, or to be driven. They are always accompanied by a member of staff who is a professional driver. These individuals are referred to as instructors. The instructor will either be driving, in which case the customer is the passenger (or one of the passengers), or will accompany a customer who has chosen to drive themselves.

The proportion of customers who choose to drive themselves (rather than be driven as passengers) is between two thirds and 60%. Customers who are driven by a professional driver may take part in a simulated race.

Rides in the M3s are sold as a separate product, and are provided to up to three passengers, who are driven by a professional driver. In the great majority of cases there will in fact be three passengers in an M3, rather than just one or two. Rides in the M3s may be purchased in advance but most are bought on the day, as an “extra” in addition to the cars that have been pre-booked.

We were given some figures for Ingliston’s sales on a typical day. On that day, around 200 people had pre-booked tickets. In terms of tickets sold, two-seaters accounted for around 80% of the sales, with the remaining 20% being for the M3s. In terms of numbers of customers, the proportion having rides in the M3s was significantly greater than 20%, as the M3s carry up to three passengers at a time.

Customers have a large age range: the normal minimum age is 12, but younger children can be accommodated in the M3s if their accompanying adult can provide a car seat. There is no upper age limit; we were given an example of a customer who was 92 years old.

Paying customers in possession of a ticket are granted access to a fenced and gated pitlane area, from where they can access their car. Friends and family of the paying customer are not admitted to the pitlane area but can watch from behind the fence. This is even the case if the customer is a child being driven in a two-seater car: their accompanying adult(s) must stay behind the fence, and the driver will escort them across the pitlane into the car. The pitlane is about five metres wide and customers will typically only take a few seconds to walk from a gate in the fence, across the pitlane and into a car.

The area behind the fence is referred to as the paddock. Anyone can access the paddock, no ticket is needed. There are catering supplies in the paddock, and these are available to the general public.

If the customer is driving themselves, the instructor’s presence in the car is both to ensure safety, and to enable the customer to have an enjoyable experience. The instructors give advice on driving technique, and guidance on braking, cornering etc. Ingliston’s website FAQs state that the instructors “hold accredited licences such as ARDS and MSA”: we did not have further evidence about these licences.

All customers receive a safety briefing before their drive.

Customers need to have a driving licence if they are over 17 and wish to drive themselves, but not if they choose to be a passenger. Ingliston also provides driving experiences for children in a separate safe environment, and the children of course do not have driving licences.

The first two paragraphs of the terms and conditions on Ingliston’s website are as follows:

“Ingliston Driving Experiences Limited (IDE), and [sic] has over 40 years’ cumulative experience in Supercar Driving Events and is delighted to offer you driving experiences of the highest quality. We are here to help you have a fun, safe, exciting and memorable time with us in pleasant surroundings.

Our Customer Service Team has years of experience and we only use the highest quality Instructors and Supercars in the Industry. Our Venues have been handpicked for their Circuit layouts and geographical locations ensuring you will have a Thrilling Drive with us.”

As a result of the covid pandemic, lockdown restrictions were brought into force in the UK from late March 2020, and Ingliston was forced to cease operating. At the relevant times, Ingliston mainly operated in Scotland, and here the lockdown was lifted in September 2020 for a short period, during which Ingliston operated two event days. The lockdown was then reimposed and not lifted until July 2021. Ingliston continued to make some sales through its website over this period, despite the lockdown.

In July 2020, the Government introduced a temporary reduced rate of VAT, at 5%, for certain supplies of hospitality, holiday accommodation and admissions to certain attractions. On the advice of its accountant, Ingliston applied the 5% rate of VAT to its supplies from 15 July 2020.

On 12 May 2021, HMRC issued a VAT assessment to Ingliston for period 10/20. The assessment was raised under VATA 1994, s 73(1) on the basis that Ingliston’s supplies should have been standard rated rather than at a reduced rate. There were also some corrections of inaccuracies in Ingliston’s input tax calculations (Ingliston has not challenged these corrections on appeal).

HMRC offered a statutory review of their decision. The offer was accepted and the review was completed on 11 November 2021, with the reviewing officer upholding the original decision that Ingliston’s supplies did not qualify for the reduced rate of VAT.

Ingliston appealed to the Tribunal on 9 December 2021.