TC09680 - [2025] UKFTT 01332 (TC)

Cascade say that HMRC’s interpretation ignores the clear wording of the statute. Note 8 sets out an exhaustive list and a new category of state-regulation cannot be added by way of judicial interpretation. The alteration to the wording which HMRC seek requires legislative amendment.

Statutory interpretation entails ascertaining the meaning of the words actually used by Parliament in light of their context and purpose: R (oao O, a minor) v Home Secretary [2022] UKSC 3; [2023] AC 255 (“oao O”) [28]-[30].

It is only the draftsman’s intention in 2002, when Note 8 was introduced, which is relevant. It is not relevant what is the current intention of Parliament (let alone HMRC).

Further, HMRC’s case does not respect the structure of the drafting. Item 9 and Note 8 plainly do not specify geographic areas of the UK which qualify, or not, for exemption. Instead, there is a universal test that private welfare institutions can only qualify for exemption if they are regulated under particular types of enactment. There is nothing in the words used in the legislation to indicate that exemption was intended to apply to welfare services supplied in Wales irrespective of how those services were regulated. The legislation specifically differentiates between services based on the type of Act which governs the regulation.

An updating construction concerns interpretation. Essentially for the reasons above HMRC’s reading of the legislation would go beyond interpretation.