TC09640 - [2025] UKFTT 01114 (TC)

This appeal concerns a decision (Decision)of HM Revenue and Customs (HMRC) issued to Isle of Wight NHS Trust (Appellant) dated 3 August 2021 that the supply of locum medical practitioners (Locums) is not a supply meeting the terms of the exemption provided under Item 5, Group 7, Schedule 9, Value Added Tax 1994 (VATA) (Item 5).

The case has a very fractious history. We need not relate that history, though the corporate animosity between the parties was an unhelpful theme that continued through the present hearing. Before us this manifested itself in the ongoing question as to whether we had sufficient evidence on which to determine the appeal and regarding HMRC’s reliance on a file of archived internal papers concerning the legislative history of what is now Item 5. We consider that these matters could, and probably should, have been resolved between the parties prior to the hearing.

This appeal is designated as a lead case. The Appellant’s representative’s letter, to which the Decision was a response, concerned 13 NHS Trusts or other recipients of the supplies of Locums. All the represented parties appealed the Decision as it concerned them individually. Seven further recipients of Locums also brought appeals against decisions reflecting the Decision (together Stayed Appeals). On 16 October 2023 the Tribunal endorsed directions finally agreed between the parties that:

“The Appeals listed in the Appendix to this Application shall be stayed until 60 days after the release of the decision of the First-tier Tribunal in the appeal of the Isle of Wight (TC/2021/03151). This stay shall, as regards any factual issue(s), be pursuant to Rule 5(3)(j) of the [Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (FTT Rules)] and, as regards the correct construction of [Item 5], which is a common issue of law in all the appeals, be pursuant to Rule 18 of the FTT Rules.”

We are grateful to Counsel and those instructing them for their detailed preparation and presentation of this appeal including their engagement with the Tribunal in questions intended to ensure a thorough understanding of their case. We assure the parties that, in preparing this judgment, full account has been taken of the documents to which we were taken, skeleton arguments and oral submissions. With a view to ensuring a succinct judgment we have summarised their positions.

We were required to determine four preliminary/procedural applications before we could begin to focus on the principal and technical issue in dispute.