General Nursing Council for Scotland v Commissioners of Inland Revenue
| Jurisdiction | Scotland |
| Judgment Date | 14 June 1929 |
| Docket Number | No. 77. |
| Date | 14 June 1929 |
| Court | Court of Session |
Lord Sands, Lord Blackburn, Lord Morison, Lord President (Clyde).
RevenueIncome taxExemptionsCharityStatutory council controlling registration of nursesFees paid by registered nursesInterest on accumulated feesWhether council established for charitable purpose onlyIncome Tax Act, 1918 (8 and 9 Geo. V. cap. 40), see. 37 (1) (b).
The General Nursing Council for Scotland, a body established by statute, was charged with the duty of forming and keeping a register of nurses for the sick, and regulating the conditions of admission to, and removal from, the register, and the conduct of examinations prescribed as a condition of admission. In carrying out these duties the Council granted recognition as training schools to hospitals where it considered the training to be adequate; prepared the syllabus of training; and appointed the examiners. Registration under the Act was not compulsory, and nurses who were not registered might practise and sue for fees, but were not entitled to call themselves registered or to wear the uniform of registered nurses. Fees were paid to the Council by nurses on application for registration, on examination, and annually after admission to the register. The income of the Council, which was mainly derived from these fees, was substantially in excess of its expenditure. The surplus income was accumulated and invested. The Council claimed exemption from income tax on the interest from these investments under sec. 37 (1) (b) of the Income Tax Act, 1918, on the ground that the Council was established for charitable purposes only.
Held (dub. the Lord President) that the duties performed by the Council were, at least in part, carried out in the professional interests of the registered nurses; and, accordingly, that the Council was not entitled to exemption from income tax under sec. 37 (1) (b) of the Income Tax Act, 1918, as a body established for charitable purposes only.
Opinion, per Lord Blackburn, that, in any event, exemption was excluded, in respect that the income in question was not applied to charitable purposes only.
At a meeting of the Commissioners for the Special Purposes of the Income Tax Acts, held on 2nd July 1928, the General Nursing Council for Scotland claimed exemption from income tax under section 37 (1) (b) of the Income Tax Act, 1918,* in respect of interest on investments and bank deposits belonging to the Council, for the five years ending 5th April 1927, on the ground that the Council was a body of persons established for charitable purposes only.
The Commissioners disallowed the claim, and, at the, request of
the claimants, stated a case for the opinion of the Court of Session as the Court of Exchequer in Scotland.
The case set forth that the following facts were admitted or proved:(1) The Council was established under the Nurses Registration (Scotland) Act, 1919 (9 and 10 Geo. V. cap. 95). Under that Act the duties of the Council are to form and keep a register of nurses for the sick, and to make rules for regulating the formation, maintenance, and publication of the register, the issue of certificates, and the conditions of admission to and removal from the register, and the conduct of examinations prescribed as a condition of admission to the register. Such rules are required to be approved by the Scottish Board of Health (hereinafter called the Board) and laid before Parliament. The appointment of the registrar, the numbers of other officers employed, the remuneration of such registrar and officers, and the methods of calculating the amounts of travelling expenses and subsistence allowances of members of the Council are subject to the approval of the Board, which appoints a person to audit the Council's accounts and receives annually copies of such accounts and of any report made thereon. The Council is required to present an annual report of its proceedings to the Board. Fees, approved by the Board, are authorised to be charged in respect of every application to be examined or to be registered under the Act, and in respect of the retention in any year of the name of any person on the register. (2) The Council consists of fifteen members. In the first instance all the members were nominated, but the Schedule to the Act provided that after a term not exceeding three years the Council should be composed of six members, nominated, one by the Privy Council, one by the Scottish Education Department, and four by the Board, and nine members elected by the nurses on the register from among their own number, and this was the composition of the Council during the period material to this case. The members hold office for five years. (3) On taking office in 1920 the Council proceeded to frame rules for admission to the register and a syllabus of training for future applicants for admission to each part of the register, but considerable time was spent in necessary consultations with the Board and the Nursing Councils established for the other parts of the United Kingdom, and in inquiring into the training provided by various classes of hospitals applying for recognition as training schools, and it was not until July 1923 that the rules for admission of Existing Nurses (i.e., nurses who had been in practice for three years before the passing of the Act) came into operation, and the rules in regard to the examination of probationers did not come into operation until September 1925. In the meantime a fresh class of Intermediate Nurses had grown up, namely, nurses who had not been in practice for three years before the passing of the Act but would have completed their training before the rules in regard to examinations came into force, and rules were framed for the admission to the register of these intermediate nurses on conditions which were more stringent than those applicable to existing nurses, and provided that the applicant must produce a certificate of not less than three years' training from a recognised training school. (4) The rules relating to the admission of nurses in training after the issue of rules require that every person applying for admission to the register after 30th September 1925 shall furnish evidence of completion of a course of not less than three years' training in a hospital approved by the Council, and shall pass the prescribed preliminary and final examinations of the Council. These examinations are held three times a year at four or five centres in Scotland. The Board of Examiners is appointed, and the examinations are arranged by the Council. The preliminary examination may be taken at any time after the nurse has completed not less than one year's training, and the final examination only after completion of at least three years' training. (5) With the approval of the Board the following scale of fees has been fixed by the Council:
| Existing Nurses | Application Fee | 1 | 1 | 0 |
| Intermediate Nurses | Application Fee | 2 | 2 | 0 |
| Later Nurses | Preliminary Examination Fee | 2 | 2 | 0 |
| Final Examination Fee | 3 | 3 | 0 | |
| All Nurses | Annual Retention Fee | 0 | 2 | 6 |
The Council received an advance of 1000 from the Treasury through the Board in the years 1920 and 1921, but this was repaid in the years 1922 and 1923. Apart from this advance the income of the Council was mainly derived from the above-mentioned fees. The object of the fees was to provide sufficient funds to enable the work of the Council to be conducted without financial loss. In some instances the fees were higher than the Council considered to be necessary for the purpose, and were adopted reluctantly in order to meet the views of the Board. (6) For each of the years 1922 to 1927 inclusive the income of the Council was substantially in excess of its expenditure. The investments and deposits producing the interest in respect of which exemption from income tax was claimed represented the accumulations of surplus income for those years. (7) The Council has appointed four committees to deal respectively with education and examinations, finance, uniforms, and disciplinary and penal cases. The last-named committee has never met and the uniforms committee has only held a few meetings. By far the greatest part of the work of the Council falls upon the education and examinations committee, which now includes every member of the Council. This committee has carried out the work of inquiry as to accommodation, cases treated, and training given at hospitals applying for recognition as training schools, and of preparation of the syllabus of training for each class of nurse, the subjects and methods of examination, and the panel of examiners. Hospitals where the training was not considered to reach the required standard have from time to time been temporarily removed from the list of approved training schools after visits by representatives of the committee. Hospitals which are taken off the approved list are entitled under the Act to appeal to the Board. Examiners are appointed on the recommendation of this Committee, and the papers set and the results of the examinations are considered by it. (8) Since September 1925 the examinations formerly conducted by the Board for the purposes of the register kept by it of(a) general trained nurses in poor law hospitals, and (b) fever nurseshave ceased and have been superseded by the examinations conducted by the Council. The Act contained special provisions to enable nurses on the Board's register to transfer to the Council's register. (9) Registration under the Act is not compulsory. A nurse may continue to practise and may sue for fees without being registered. A person not duly registered may not take or use the name or title of registered, or wear the uniform of a registered nurse. The uniform is not in fact generally worn by persons on the register. (10) Copies of the rules framed by the Council, the accounts for each of the years 1920 to 1926 inclusive, and the annual report to the Board for the...
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