UT/2023/000009 - [2024] UKUT 00162 (TCC)

Spectrum raised a separate, discrete, point under this ground, namely that the FTT erred in stating (at [70]) “…both parties accept that if Spectrum makes a single composite supply then that supply is exempt as a supply of medical care”. It contends that this represents an oversimplification of its case. Ms Hall submitted that Spectrum’s concession was qualified, in that the single composite supply only fell within exemption c) if “medical care” was the predominant element within that supply, but that the FTT failed to acknowledge this.

At face value, this is a surprising submission. As we have noted above, once it is established that there was a single supply, in order to determine whether it falls within a particular exemption it is necessary to determine its predominant element. The FTT did not do so, because it did not need to do so in view of the concession recorded at [70]. If Spectrum’s concession was qualified in the way now suggested, then that meant that the FTT should have investigated, as a matter of fact, what was the predominant element of the supply. Its failure to do so would be an obvious independent ground of appeal.

Nowhere, however, does this point feature in Spectrum’s actual grounds of appeal (as we set out at [34] above). The only reference to it in the grounds of appeal document, which expands on each of the four numbered grounds of appeal, is at [49] where it is said that the FTT over-simplified Spectrum’s case, because it had accepted that if the FTT found against it on the multiple supply issue, and therefore on the EC v UK issue, and if the predominant element of a single supply was medical care, then it would accept that such a single supply was medical care.

Moreover, it was no part of Spectrum’s case before the FTT that medical care was not – as a matter of fact – the predominant element in the single supply. No argument was addressed by it to the FTT on the point. Rather, its case was that the single supply could not be within exemption c) because, on its view of EC v UK, of the inherently narrow nature of that exemption.

In the course of the hearing, however, we understood Ms Hall to accept that it was not part of Spectrum’s case that – as a matter of fact – the predominant element of the single supply (if, contrary to its primary case, there was a single supply at all) was something other than medical care. She clarified that Spectrum would “never have made the concession without the caveat because to do so would have effectively conceded away the central proposition in Spectrum’s case – that the concept of medical care in (c) is very narrow and could not be expanded via CPP/Levob principles.” In other words, the contention advanced before the FTT was that the single supply could not (as a matter of law) be within exemption c) because of the narrow scope of that exemption. She confirmed that Spectrum had not made submissions to the FTT that medical care was not in fact the predominant element of a single supply.

Understood in that way, then we do not accept that the FTT misunderstood, or oversimplified, the concession that was being made by Spectrum. The FTT clearly understood that Spectrum contended that even if there was a single supply it could not fall within exemption c), because of the inherently narrow scope of the exemption, per EC v UK. The FTT addressed, and rejected, Spectrum’s case on EC v UK and Klinikum at [101] to [111]. It therefore understood that Spectrum was not conceding the central proposition in its case.

Given this conclusion, it is unnecessary to consider the precise formulation of the concession made to the FTT (noting, for example, that in Spectrum’s pleaded case the concession is unqualified, although the qualification is identified in one paragraph of its skeleton before the FTT). However it was formulated, we are satisfied that Spectrum was not contending before the FTT that if there was a single supply, and if its case on EC v UK failed, medical care was not the predominant element of the single supply.

In clarifying Spectrum’s case before us, Ms Hall also pointed to the description of the supply at FTT [67]. She contended that it went far beyond anything Spectrum would have accepted as being a description of a single supply, and indeed beyond anything that HMRC had argued for. She pointed out that the FTT’s description included, for example, social care and went much broader than the confines of the medical care envisaged by exemption c). Ms Hall also submitted that HMRC did not clearly identify the scope of the single supply it relied upon and highlights the number of different ways they referred to it: their Statement of Case referred to “health and wellbeing related services in prisons” and “care or medical or surgical treatment and in connection with it, the supply of any goods, in any hospital or state regulation institution; HMRC’s FTT skeleton referred variously to “prison health care services”, healthcare package”, and “healthcare”; HMRC’s oral submissions referred to “healthcare in prisons” and “exempt medical care”.

Insofar as Ms Hall submitted that Spectrum had not made submissions that medical care was not the predominant element of the single supply, because it had not anticipated the width of the description the FTT would subsequently make, then we reject that submission. The scope of the elements which it was contended fell within the single supply was always known to Spectrum. The elements were identified in the various evidence and documents which HMRC relied on before the FTT, and which are described at FTT [17] to [46]. The term subsequently used by the FTT to describe the single supply is irrelevant, particularly as (given Spectrum’s concession, and the fact that it was not contending otherwise) it was common ground that the predominant element in the supply was medical care. The precise formulation of the single supply was not in issue.