Northumbria Healthcare NHS Foundation Trust v The Commissioners for HM Revenue and Customs [2022] UKUT 00267 (TCC)
| Jurisdiction | UK Non-devolved |
| Judge | Mrs Justice Bacon,Judge Cannan |
| Neutral Citation | [2022] UKUT 00267 (TCC) |
| Subject Matter | 6 October 2022 |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Published date | 18 October 2022 |
VALUE ADDED TAX – supply of car parking by NHS Trust – Article 13(1) PVD – s41A VATA 1994
– whether the trust was engaged in the activity as a public authority – whether supply was provided
under a special legal regime – whether treating the trust as non-taxable in respect of the activity
would lead to a significant distortion of competition
UT Neutral citation number: [2022] UKUT 00267
UT (Tax & Chancery) Case Number: UT-2021-000149
Upper Tribunal
(Tax and Chancery Chamber) Rolls Building
Fetter Lane
London
EC4A 1NL
Heard on 17 May 2022
Judgment given on 06 October 2022
Before:
MRS JUSTICE BACON
JUDGE JONATHAN CANNAN
Between
NORTHUMBRIA HEALTHCARE
NHS FOUNDATION TRUST Appellant
and
THE COMMISSIONERS FOR HIS MAJESTY’S
REVENUE AND CUSTOMS Respondent
Representation:
For the Appellant: Michael Firth, Counsel, instructed by VATangles VAT Consultancy
For the Respondent: Howard Watkinson, Counsel, instructed by the General Counsel and Solicitor
for His Majesty’s Revenue and Customs
2
DECISION
Introduction
This is an appeal against a decision of the First-tier Tribunal (the FTT) released on 11 March
2021, [2021] UKFTT 71 (TC) (the Decision). The FTT dismissed the appeal of Northumbria
Healthcare NHS Foundation Trust (the Trust) against HMRC’s determination that VAT was
chargeable by the Trust on its supplies of car parking at hospital and healthcare sites. On the basis of
that determination HMRC refused to repay VAT accounted for by the Trust during the periods 05/13
to 03/16.
The single issue in this appeal is whether the Trust is a taxable person when making supplies of
car parking in car parks at its hospitals, as the FTT found, or whether in so doing it is acting as a
public authority pursuant to Article 13 of the Principal VAT Directive 2006/112/EC (PVD) as
implemented by section 41A of the Value Added Tax Act 1994 (VATA). That in turn raises two
questions: first, whether the Trust’s supplies of car parking are made pursuant to a “special legal
regime” applicable to the Trust, which is not applicable to private economic operators; and secondly,
if so, whether treating the Trust as a non-taxable person would lead to a significant distortion of
competition.
At the hearing before us on 17 May 2022 it was agreed that further submissions would be provided
once the Upper Tribunal had handed down its (then pending) decision in HMRC v Chelmsford City
Council. That was handed down on 15 June 2022 ([2022] UKUT 00149 (TCC)), following which we
received written submissions from both parties. We have taken account of those submissions in this
decision. HMRC also, in August, drew our attention to two passages in the decision of the Upper
Tribunal in HMRC v Mid-Ulster District Council handed down on 19 July 2022 ([2022] UKUT 00197
(TCC)). While we have referenced that decision for completeness below, the issues in that case were
quite different from the issues in the present case and do not have any material bearing on our analysis
in this decision.
The amount of VAT at stake in this appeal is £267,443, but we understand that around 50 similar
appeals by NHS bodies are stayed behind this appeal, with the total tax at stake of around £70m.
Factual background
The FTT heard evidence from two witnesses on behalf of the Trust, which it found to be credible;
it fully accepted their evidence of fact. The material findings of fact, based on the written and oral
evidence, are set out at §§11–32 of the Decision. For the purposes of this appeal, the following
summary suffices, with references to the relevant paragraphs of the Decision.
Under the Trust’s constitution, the principal purpose of the Trust is to provide goods and services
for the purpose of the health service in England, but the Trust may also carry on activities for the
purpose of generating additional income in order to better carry on its principal purpose (§14).
The Trust is required by its stakeholders and relevant guidance to ensure that its sites and services
are accessible at reasonable cost. That obligation includes the provision of parking for patients and
visitors at a reasonable price (§23). The area covered by the Trust is mostly rural, and availability of
public transport can be limited or non-existent. Around 80% of visitors to the Trust’s main hospital
sites arrive by car (§11).
The Trust’s parking facilities are mostly used by those accessing the hospital and healthcare
facilities. The location of some of the Trust’s sites means that they are unsuitable for parking and
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