TC09640 - [2025] UKFTT 01114 (TC)

We have some difficulty in applying the mischief rule. It has its genus in Heydon’s Case. Its purpose is to look at the identified defect in the common law which necessitated a legislative remedy.

The Executive of the Government has no power to collect tax save by reference to the express terms of statute; there was thus no common law defect that required a statutory remedy. However, and by reference to the EN and Explanatory Memorandum, we can be satisfied that, at least as regards the provisions of deputies through a deputising service, it was felt necessary to enact a statutory provision bringing them within the scope of the exemption but using statutory language which was not so limited.

We consider that in doing so a rational, reasonable and informed legislature must have concluded that the provision of a deputy did not come within the terms of the other Items within Group 7 even when interpreted with the benefit of what is now Note 2. That the UK Parliament is presumed to be a rational, reasonable, and informed legislature that does not legislate in vain is confirmed in in R (Ahmed) v Secretary of State for the Home Department [2019] EWCA Civ 1070 at paragraph 15 (approving Bennion Section 11.3: Presumption of ideal, rational legislature).

There is no public record explaining the basis on which, in 1979, HMRC concluded that deputising services were not included within Item 1. We can now discern that the provision of a deputy by a deputising service was properly excluded from Item 1 because a deputising service is a supply of staff rather than a supply of medical care (see Mainpay at paragraphs 57 and 69) and as such, if those supplies were to benefit from exemption, Item 5 was needed.