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

Turning then to the relevance of the activity being carried out as a matter of public duty, as already indicated above, the court in Lajver has indicated that this factor is not relevant (see [45] and [46] above).

Similarly in Commission v Finland where the question arose as to whether legal aid services provided by public offices pursuant to legally regulated duties, in return for part payment, constituted economic activities, the CJEU held at [40]:

“…in view of the objective character of the term ‘economic activities’, the fact that the activity of the public offices consists in the performance of duties which are conferred and regulated by law, in the public interest and without any business or commercial objective, is in that regard irrelevant.”.

As to the relevance of the funding being public funding, the Trust’s skeleton noted that the CJEU in Commission v Finlandhad found that, despite the individual’s fee contribution being consideration, there was nevertheless no economic activity. On that basis, the Trust argues that where public funding “comes first” (in the sense the public funding was needed for the services to function in the first place) there is no economic activity. We do not agree that this proposition follows. The focus of enquiry in Commission v Finland was on the part payments made by individuals. It was those payments which comprised the relevant “income” in respect of which the question was asked: was the supply made for the “purpose of obtaining income”? There was no suggestion that the public funding received by the public offices providing the legal aid services was reflected in the consideration for those supplies. As such, the question of whether there was a “purpose of obtaining” (publicly funded) income so as to give rise to an economic activity did not arise. By contrast, we have concluded under Issue 1 that the publicly funded payment made by the local authorities to the Trust did constitute consideration for the provision of the relevant health services in this case.