Weight Watchers has failed in the House of Lords in a bid to maintain some pounds - not of flab but of sterling - that they sought to keep out of the hands of the UK taxman. Instead, three law lords have backed the taxman's stance over the VAT liability of Weight Watchers. They have refused permission for the organisation to challenge an Appeal Court decision in June last year where it was held that it must pay VAT on £9 of the initial enrolment fee paid by new members on their first meeting. At an earlier hearing the High Court had exempted that £9 from VAT on the basis it covered printed materials. Up until 2005, Revenue and Customs treated the whole service provided by Weight Watchers to slimmers throughout their membership as a 'mixed supply', with 80 per cent of the takings treated as standard rated for VAT, and the remaining 20 per cent 'zero rated'