Marriott Rewards and another v HMRC

In Marriott Rewards and another v HMRC [2018] UKUT 129 (30 April 2018) the UT found that the operator of a hotel loyalty scheme made payments for supplies it received so that there was no third party consideration.

The appeals concerned a customer loyalty scheme (‘the Program’) ran by Marriott Rewards (MR) in connection with hotels operating mainly under the Marriott brand. The main issue was whether payments made by MR to participating hotels were payments made in consideration for supplies to MR or third party consideration paid by MR for supplies made by participating hotels to customers who redeemed points.

The UT observed that if HMRC succeeded in establishing that the payments were third party consideration it would receive more VAT than was properly due to it. It gave the example of a customer who pays for four nights (at £200 each) and receives the fifth night...