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The King (oao) Midlands Partnership University NHS Foundation Trust v HMRC – Court of Appeal refuses the Trust permission to Appeal (16 December 2025)
The Court of Appeal has refused the Trust permission to appeal from the Upper Tribunal’s decision in The King (oao) Midlands Partnership University NHS Foundation Trust v HMRC [2024] UKUT 00334 (TCC), thereby finally concluding this VAT judicial review in HMRC’s favour. Relevant public health services supplied to local authorities by the Trust were within the scope of VAT.
The Court of Appeal stressed that where a public body sought to rely on Article 13(1) PVD (and see s 41A VATA 94) to establish that supplies which it made were outside the scope of VAT then the public body was required to establish that differences in the legal conditions under which it operates have a material impact on the way in which the relevant services are provided, as compared to private operators that may provide those services.
The UT had dismissed the Trust’s claim that the provision of various public health services by it to local authorities were not in the course of a business or economic activity because, the Trust having contended that they were not in return for consideration, in any event, not economic activity within Article 9 PVD, or alternatively not economic activity within Article 13 PVD because in providing the services they engaged in those activities as public authorities. The UT dismissed the claim on all grounds. The Trust applied to the UT for permission to appeal to the CA, on all grounds apart from ‘no consideration for supply’, but was refused permission by the UT.
The Trust made a further application for permission to appeal to the CA. The CA deferred deciding the application until after the Supreme Court gave its judgment in Northumbria Healthcare NHS Foundation Trust v HMRC [[2025] UKSC 37 (‘Northumbria SC’), which was relevant to Article 13 PVD, then proceeded to decide the application on the papers.
The CA refused permission to appeal for the following reasons:
On the Article 13 PVD “acting as a public authority” point, in relation to ‘special legal regime’ the Trust had failed to establish that differences in the legal conditions under which it operates have any material impact on the way in which the relevant services are provided, as compared to private operators that may provide those services (see Northumbria SC at [60], [67] and [78]).That was critical and there was no arguable error in the approach of the UT on that point.
On the Article 9 PVD “no economic activity” point, the CJEU case law indicates there may be economic activity even if there is public funding or the performance of a public duty. There was no arguable error in the UT’s approach to the question of whether there was economic activity. It was entitled, and indeed bound, to have regard to the facts, including the contractual framework and tendering process, which were objective, not “subjective”, factors.
The Edwards v Bairstow type challenge to findings of fact by the UT did not arguably meet the high standard required to challenge the
UT’s factual findings. In reality, as a generalised attack, it was hopeless. It was therefore not necessary to address the further (apparently legitimate) complaint by HMRC that this ground was not put to the UT when permission to appeal was sought from the UT.
Peter Mantle represented HMRC in the Court of Appeal and appeared on behalf of HMRC in the Upper Tribunal.