Northumbria Healthcare NHS Foundation Trust (Respondent) v Commissioners for His Majesty's Revenue and Customs (Appellant)

Case summary

Case ID

UKSC/2024/0048

Parties

Appellant(s)

Commissioners for His Majesty's Revenue and Customs

Respondent(s)

Northumbria Healthcare NHS Foundation Trust

Issue

Did the Court of Appeal err: (i) in its conclusions as to the objective and correct interpretation of the legislation applicable to determining whether the Trust was a taxable person for the purposes of value added tax (“VAT”). (ii) in its understanding of the facts that need to be proved in order to determine whether there is a significant distortion of competition under the applicable legislation.

Facts

This appeal concerns whether VAT should have been charged on the supply of car parking at hospitals. Ordinarily, VAT is charged on the supply of goods and services. However, there is an exception where a public body is supplying a service, which would otherwise be taxable, if it is ‘acting as a public authority’. A body is ‘acting as a public authority’ if it acts under a ‘special legislative regime’ (“SLR”). A body will be acting under an SLR when it is under different legal rules to a private operator carrying out the same activity. If the exception applies, the public body is not treated as a taxable person and so it does not have to charge VAT on its supply of the relevant goods or services. Even when this exception applies, if treating the public body as non-taxable would lead to ‘significant distortions of competition’, then the public body is restored to being taxable. This appeal relates to the supply by the Northumbria Healthcare NHS Foundation Trust (“the Trust”) of paid-for car parking at various sites between May 2013 and March 2016. The Trust argued that it was acting under an SLR, because there was guidance from the Department of Health regarding its car parking operations in conjunction with the public law obligation to follow such guidance unless there was good reason not to. The Trust therefore argued that his meant it was not a taxable person when it supplied car parking. Alternatively, the Trust argued that provision of car parking was closely linked to its functions of providing healthcare and so it was not a taxable person when it supplied car parking. On this basis, the Trust made a claim for overpaid VAT. HMRC rejected the Trust’s claim and both the First-Tier Tribunal (Tax Chamber) (“FTT”) and the Upper Tribunal (Tax & Chancery Chamber) (“UT”) dismissed the Trust’s appeal. The Court of Appeal allowed the Trust’s appeal. HMRC now appeals to the Supreme Court.

Date of issue

26 March 2024

Judgment appealed

Judgment details

Judgment date

29 October 2025

Neutral citation

[2025] UKSC 37

Judgment links

Appeal

Justices

Lord Hodge

Lord Hamblen

Lord Burrows

Lord Richards

Lady Simler

Hearing dates

Full hearing

Start date

7 April 2025

End date

8 April 2025

Watch hearings

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