The Court of Appeal has rejected the taxpayer’s appeal and confirmed the decisions of the FTT and Upper Tribunal (Mainpay Ltd v HMRC [2022] EWCA Civ 1620).
Earlier case law had made it clear that “there is a distinction between supplies of staff on the one hand, and supplies of services comprising what the staff actually do, on the other”.
The Court of Appeal summarised its findings as follows (at para. 83):
“The FTT concluded, based on the contractual arrangements and the circumstances in which the consultants worked, that the consultants were under the control, direction and supervision of the NHS Trusts for the duration of the assignment; they effectively became part and parcel of the NHS Trusts which themselves provided medical care to patients (FTT [115]). In consequence, and after detailed consideration of Mainpay’s submissions, it found that the essence of the supply was that of staff, rather than medical services (FTT [119]). The UT held that that was a conclusion to which the FTT was entitled to come, on the evidence before it and on the facts as found; as a matter of commercial and economic reality, Mainpay provided consultants (staff) to A&E, which consultants were on-supplied by A&E to the NHS Trusts, which Trusts used the consultants to provide medical care to their patients (UT [115]). I can find no fault in the approach of either the FTT or the UT. The short answer to Mr Firth’s case is that it does not fit the facts as they have been found by the FTT. The commercial and economic reality is that Mainpay provides supplies of staff, not medical care, to A&E.”
The Court of Appeal also unanimously rejected company arguments based on (a) the purpose of the medical VAT exemption and (b) the principle of fiscal neutrality. A fourth argument was also rejected on technical grounds.
https://www.bailii.org/ew/cases/EWCA/Civ/2022/1620.html
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