Isle of Wight Council and others v The Commissioners For Her Majesty's Revenue and Customs
| Jurisdiction | UK Non-devolved |
| Judge | MRS JUSTICE PROUDMAN DBE |
| Judgment Date | 15 October 2014 |
| Neutral Citation | [2014] UKUT 0446 (TCC) |
| Respondent | REVENUE AND CUSTOMS |
| Appellant | BOROUGH COUNCIL |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Appeal Number | FTC/50/2013 |
[2014] UKUT 0446 (TCC)
Appeal number FTC/50/2013
VALUE ADDED TAX — local authorities — off-street parking — whether treatment
as a non-taxable person would result in significant distortion of competition within Sixth
VAT Directive art 4.5 — yes — no error of law in the findings of the FTT — appeal
dismissed
UPPER TRIBUNAL
TAX AND CHANCERY CHAMBER
(1) ISLE OF WIGHT COUNCIL
(2) WEST BERKSHIRE COUNCIL
(3) MID-SUFFOLK DISTRICT COUNCIL
(4) SOUTH TYNESIDE METROPOLITAN
BOROUGH COUNCIL Appellants
- and -
THE COMMISSIONERS FOR HER MAJESTY’S
REVENUE AND CUSTOMS Respondents
TRIBUNAL: MRS JUSTICE PROUDMAN DBE
JUDGE COLIN BISHOPP
Sitting in public at The Rolls Building, Fetter Lane, London EC4A 1NL on 10 and 11
April 2014
Julian Ghosh QC, Clive Sheldon QC, Jonathan Bremner and Edward Capewell,
instructed by Rowel Genn, solicitors, for the Appellants
Alison Foster QC, Ben Rayment and Brendan McGurk, instructed by the General
Counsel and Solicitor to HM Revenue and Customs, for the Respondents
© CROWN COPYRIGHT 2014
2
DECISION
Background
1. This case has a long history. The first of the decisions now relevant, of the
then VAT and Duties Tribunal constituted of Mr Stephen Oliver QC and Mr
Kenneth Goddard MBE, was given as long ago as 23 January 2006 ((2006) VAT 5 Decision 19427), when the Tribunal allowed the appeals of the four appellant
local authorities against HMRC’s refusal to refund VAT for which they had
previously accounted. HMRC appealed the decision to the Chancery Division and
Rimer J (at [2007] EWHC 219 (Ch), [2008] STC 614) referred the matter to the
European Court of Justice (“ECJ”) to obtain answers to questions relating to the 10 construction of article 4.5 of the Sixth Council Directive of 17 May 1977
(77/388/EEC) (“the Sixth Directive”). The Grand Chamber of the ECJ gave its
answers in Revenue and Customs Commissioners v Isle of Wight Council (Case C-
288/07) (reported at [2008] STC 2964) on 16 September 2008. The matter then
reverted to the Chancery Division (Rimer LJ, as he was by then) which (at [2009] 15 EWHC 592 (Ch), [2009] STC 1098) allowed HMRC’s appeal and remitted the
matter back to what had by then become the First-tier Tribunal (“the FTT”), “for
the competition/Article 4.5.2 issues determined by the VAT Tribunal on 23
January 2006 to be reheard and determined in accordance with the judgment of
the European Court of Justice in Case C-288/07”. 20
2. There was then a directions hearing by the FTT, on this occasion Judges Sir
Stephen Oliver QC and Nicholas Paines QC, resolving a dispute between the
parties about what categories of evidence were admissible at the rehearing. They
released their decision on 11 June 2011. In May 2012 the FTT, by a panel now
consisting of Judges Oliver QC and Paines QC and Mr Philip Gillett FCA, re-25 heard the appeal and released its decision ([2012] UKFTT 648 (TC), reported at
[2013] SFTD 442) on 12 October 2012. By that decision the FTT found in favour
of HMRC. The FTT (Judges Oliver QC and Paines QC) refused permission to
appeal to this Tribunal (“the UT”) but permission was granted by Judge Bishopp
in the UT in May 2013. That is the appeal now before us. 30
3. Claims had been made to HMRC by the appellants (and many other local
authorities) in accordance with s 80 of the Value Added Tax Act 1994 for
repayment of the VAT included in charges made by them to members of the
public for off-street car parking. The claims related to the VAT for which the
appellants had accounted since 1 January 1978. The issue before the FTT was 35 whether they had been correct to charge and account for that VAT, an issue whose
outcome depended upon whether each of the appellants was entitled to be treated
as a non-taxable person in respect of its supplies of off-street parking. The answer
to that question in turn depended upon whether non-taxation would lead to
significant distortions of competition within the meaning of article 4.5, which was 40 in these terms:
“States, regional and local government authorities and other bodies governed
by public law shall not be considered taxable persons in respect of the
activities or transactions in which they engage as public authorities, even
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