UT/2023/000021 - [2024] UKUT 00334 (TCC)

The next issue is whether the activity in question (the supply for consideration of services from the Trust to the local authority) is an economic activity within the meaning of Article 9 PVD.

In Wakefield, the issue was whether supply of courses to students paying subsidised fees was an economic activity. The Court of Appeal undertook a rigorous analysis, unravelling the principles established by the CJEU jurisprudence on the meaning of “economic activity” under Article 9, reconciling how they sat with the “for consideration” requirement under Article 2. At [53], the Court noted that satisfaction of the test of whether a supply was “for consideration” did not give rise to a “presumption or general rule that the supply constitutes an economic activity” but that, as the Advocate General had remarked in Borsele,“the same outcomes may often be expected”.

The Court of Appeal explained, following its review of the case-law, that “the issue is whether the supply is made for the purposes of obtaining income therefrom on a continuing basis” ([55]) and that required:

“a wide-ranging, not a narrow enquiry. All the objective circumstances in which the goods or services are supplied must be examined….this does not include subjective factors such as whether the supplier is aiming to make a profit.”

The question of “purpose” under Article 9 was “an entirely objective enquiry” and “fact-sensitive”. Regarding the CJEU cases of Commission v Finland (Case C-246/08) (supply of legal aid services) and Borsele (school transport), to which we were referred as well, the Court noted that these provided “helpful pointers to at least some of the factors relevant” to subsidised educational activities but that there was not “a checklist of factors to work through” and that “[e]ven where the same factors are present they may assume different relative importance in different cases”.