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

Under this ground Spectrum argues the FTT was wrong not to first deal with the issue of how EC v UK should be interpreted (which, in Spectrum’s view effectively constrained the applicability of the single/multiple principles under CPP /Levob) before addressing the question of whether, on the facts of Spectrum’s case, there was a single or multiple supply. Spectrum submits this led to circular reasoning: the FTT used the fact there was a single supply in Spectrum’s case as a key point of distinction between Spectrum’s case and Klinikum when the EC v UK interpretation issue (which the FTT dealt with second) affected the very issue of whether there could be a single composite exempt supply in the first place.

Ms Hall, rightly in our view, did not press this ground in her oral submissions. She focussed instead on the FTT’s errors of interpretation under Ground 2 below. We agree with Mr Henderson that there was no error of law in the order in which the FTT chose to deal with the issues. On the contrary, the FTT’s approach represented the orthodox view under the case-law: as the CJEU explained in Město at [27]:

As Mr Henderson pointed out, (while there is no inflexible rule as to the order in which a tribunal addresses these matters) it makes logical sense to reach a view on whether there is a single or multiple supply before one then characterises that single or those multiple supplies to assess, for example, whether they fall within a particular exemption. The risk otherwise is that the court or tribunal will end up characterising something which turns out not to be a supply but a component of one.

There was also no concern that by ordering the issues as it did the FTT’s reasoning became circular. The circularity Spectrum alleges only arose on the assumption that the FTT ought to have decided the scope of EC v UK in Spectrum’s favour. As we explain below however in our discussion of Ground 2, that assumption is incorrect.

That discussion also makes it clear that the FTT did not, as Spectrum submitted, sidestep the core question of whether (on the facts of this case) it is possible for a CPP or Levob analysis to expand the limitations of scope imposed by EC v UK on the scope of exemption c).