Upper Tribunal Tax and Chancery Chamber

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

Fecha: 21-Mar-2024

Ground 4 Edwards v Bairstow

Ground 4 Edwards v Bairstow

98.

Under this ground Spectrum argues that an error of law arises under Edwards v Bairstow [1955] 3 WLR 410 because the only conclusion available to FTT, on the evidence (all of which the FTT accepted) and the facts found, was that Spectrum did not make a single supply of medical care within exemption c).

99.

Ms McAndrew, who addressed this part of the case on behalf of Spectrum, advanced the following nine factual indicators which, she submitted, meant the FTT had to find that there were multiple supplies.

(1)

Prisoners do not take up all services – for instance a prisoner may see a GP but may not receive a prescription, or a repeat prescription may not require medical care (FTT [38]). Self-evidently a prisoner might get nursing care but no other services, they might get optometry but not dentistry. The services are provided independently, and the prisoner may choose to receive them separately. Each is thus an end in itself.

(2)

The services are provided to prisoners in different physical locations (FTT [39]). Doctors conduct GP surgeries, and each prison has separate consulting room for this purpose. The evidence referred to the pharmacy dispensing and it could reasonably be assumed that, as well as e.g. dentistry and optometry services would be carried out at different specific locations.

(3)

Services are provided by different personnel with different specialist functions. For example, pharmacists dispense medication (FTT [40]). Sexual health services are provided principally by specialist nurses (FTT [43]). The highly specialist nature of the healthcare services including optometry, podiatry and physiotherapy would obviously require different trained personnel.

(4)

Prisoners do not generally receive all or most of services at same time. For instance drugs are dispensed after a GP consultation and this also flows from the fact different services are provided at different physical locations at different times.

(5)

Prisoners who receive dispensed drugs have the choice whether to take them. The same is true of contraceptive products. Consumption is separate from the care provided by the GP.

(6)

Contraceptive products may ordinarily be provided separately to medical care (products may be available outside of healthcare wing, condoms provided to all prisoners who ask for them).

(7)

There are distinct service specifications for each distinct element of the NHSE contract. The FTT gave pharmacy services as the example (FTT [30]) but it can be seen the other ones are set out differently with different personnel, times of provision and with their own scope and objectives. Additionally, Spectrum can choose to sub-contract under the overarching contract (sub-contracting for instance the supply and dispensing of drugs to community pharmacies) (FTT [19], [33-34], [40] [42]). The fact that particular services could be subcontracted and hived off showed they were regulated separately.

(8)

The way in which the contract was used and its scope of services were not static and varied over time. Under the original contract Spectrum was a “partnership provider” only responsible for delivering some of the services which made up the full suite of health care services – other services were commissioned separately from different providers. That changed in 2013 to Spectrum being a lead provider under an “apex” contract. Ms McAndrew submitted the fluidity of the commissioning structure indicated the services were separate - with services coming in (e.g. mental health) and going out (e.g. dentistry).

(9)

The cost of each service is easily identifiable (HMRC did not appear to dispute this but highlight a single headline price is invoiced).

100.

We are not persuaded that the above points surmount the hurdle of showing that the only conclusion open to the FTT was to find multiple supplies and that it erred in rejecting Spectrum’s case. As HMRC point out, many of the points (points 1 to 6) fall away if the FTT was correct (as we have found it was under Ground 3 above) to consider the circumstances from the point of view of NHSE as the typical consumer. We do not see, for instance, how the fact that the services were provided by different specialists, in different locations, and at different times would be significant pointers towards to separate supplies from the point of view of a consumer (NHSE) tasked with providing an integrated suite of primary healthcare services to cohorts of prisoners.

101.

None of the remaining factors, whether individually or together, would have compelled the FTT to conclude there were separate services. The fact there are different specifications for the various services simply reflected the different nature of the services but was not inconsistent with the services being related to each other as a composite supply to NHSE of primary healthcare. The fact that elements within the single price that was paid could be identified in respect of one or more distinct elements could not be of any significance and was not inconsistent with the existence of a single composite supply. We consider the fact that Spectrum could, and did, subcontract certain services to be more consistent with the supply being a single supply, where Spectrum was responsible to the NHSE for providing an overall package of primary healthcare.

102.

As regards Ms McAndrew’s 8^th point, we consider that the fluidity of the contractual structure, whereby certain elements could be dropped or introduced over time, is not inconsistent with whatever elements that were covered by the contract at a given point in time being considered a single package of services at a given point in time. In other words, a healthcare package was no less a healthcare package because at one point it did not contain dentistry, and at another it included mental health.

103.

From the transcript of the oral exchanges which took place before the FTT on this matter it is clear the FTT understood the contract had changed in scope and acknowledged (noting the limited scope of evidence it had heard) that changes to the scope of the contract might occur in the future. It rightly identified that the question of whether there were single or multiple supplies arose in relation to a VAT registration decision with respect to a particular period. It is implicit in that view, and we did not understand HMRC to disagree, that if the different content of elements in a particular period following that considered in the proceedings before the FTT were to give rise to a materially different analysis, then the question of whether there were single or multiple supplies might need to be revisited on the basis of the particular contract which applied at the time.

104.

We accordingly reject this ground of appeal.