“Member States shall exempt the following transactions: ... (b) hospital and medical care and closely related activities undertaken by bodies governed by public law or, under social conditions comparable with those applicable to bodies governed by public law, by hospitals, centres for medical treatment or diagnosis and other duly recognised establishments of a similar nature; (c) the provision of medical care in the exercise of the medical and paramedical professions as defined by the Member State concerned; …”
“… whether the consultants come under the control, direction and supervision of the NHS Trusts. If so, that would be a supply of staff by Mainpay. If not, then it would be a supply of medical care by Mainpay. We will consider that test taking into account the objective of the exemption and the EU law principle of fiscal neutrality.”
“… In our view the consultants engaged by Mainpay carried out their work within the framework of the NHS Trust, in the sense that they operated within the remit of local policies laid down by the NHS Trust. Mainpay’s consultants were incorporated into the organisation of the NHS Trust in the same way as a consultant who might have been employed directly by the NHS Trust. Mr Firth described the question in terms of ‘what is the essence of the supply’. Based on the evidence as a whole we regard the essence of the supply as being that of staff, rather than medical services.”
“To be clear, our task is only to determine whether Mainpay’s supplies fell within Article 132(1)(c). Contrary to the tenor of some of the submissions made to us by [counsel for Mainpay], it is not necessary for us to determine whether those supplies constituted a supply of staff – a term used in the context of the exemption for hospital and medical care neither by the domestic legislation nor by the Directive – or to define the hallmarks of such a supply.”
“medical services must be involved and they must be supplied by persons who possess the necessary professional qualifications”
“[Counsel for HMRC] argued … that the sole issue before this Court was whether Mainpay’s services came within the medical exemption; if they did, the appeal succeeded; if they did not, then the appeal failed and it was not necessary to define Mainpay’s services, whether as a supply of staff or anything else, because by operation of s 4 VATA those services would be taxable at the standard rate. On that footing, much of the FTT's and the UT's analysis of what amounted to a supply of staff was, strictly speaking, unnecessary, and Mainpay’s arguments that this was not a taxable supply of staff ‘missed the mark’ (to quote [5(d)] of HMRC's skeleton).”
“The focus of this appeal has undoubtedly shifted. Before turning to the cases about the scope of Article 132(1)(c), which are now centre stage on [counsel for Mainpay]’s argument, it is necessary to clear the decks of two preliminary points raised in challenge to the approach adopted by the FTT.”
“51. I accept the point made by the UT at [93] and now by [counsel for HMRC] in their skeleton argument, that the issue of law is whether Mainpay’s services are exempt. [Counsel for Mainpay] saw that as a significant change in HMRC’s case. I am not convinced that it did represent a change of anything more than emphasis. But in any event, I am quite satisfied that there is nothing wrong, conceptually, in approaching the issue in the way the FTT did, by asking whether this was a supply of staff or a supply of medical services. Those two analyses are mutually exclusive. If there is a supply of staff, that necessarily means that the supplies are taxable and not exempt. 52. The reason the FTT and the UT approached the issue in that way was because that is how HMRC framed their decision in the first place. The review letter was dated25 June 2015 and it referred to Notice 700/34, which contains HMRC’s policy on the supply of staff and staff bureaux. HMRC’s statement of case in the FTT asserted that Mainpay was making a supply of staff, noting that the NHS Trusts directed and controlled the activities of the consultants …. 53. The distinction between a supply of staff on the one hand and a supply of the services of those staff on the other is reflected in case law and accords with ordinary principles of VAT. …”
“These cases make clear that there is a distinction between supplies of staff on the one hand, and supplies of services comprising what the staff actually do, on the other. HMRC based its decision on that distinction. The FTT considered Mainpay’s appeal by addressing that distinction. That remains a valid distinction in determining this appeal.”
“I accept [counsel for HMRC]’s answer on the CJEU cases. None of them carries Mainpay home. The facts of each are important to the CJEU’s confirmation that the medical exemption applied (or, in the case of Klinikum Dortmund, did not). It is the facts of this case, judged through the lens of commercial and economic reality, which determines whether Mainpay was making supplies of medical care, or not. It is to that issue which I now turn.”
“79. Mainpay argued that it had control over the consultants in a number of different ways. I have already dealt with its argument in the FTT that it retained control over clinical decision-making, an argument that the FTT rejected by looking instead at the framework of control over the consultants, finding that was operated by the NHS Trusts (see above at paragraphs 58-60). 80. Other variants of Mainpay’s case on control resurfaced during the course of argument in this Court. … 82. Thirdly, and for the first time in this Court, Mainpay submitted that Mainpay’s services were the same as and were constituted by the services provided by the consultants. This argument runs close to the Article 10 argument which I have rejected in the preceding paragraph. It was advanced as part of the argument based on Kügler [27], which I have also rejected. But in any event, this argument fails in its own right. As a matter of principle, it wrongly conflates a supply of staff with a supply of the services provided by those staff; but these are conceptually distinct types of supply (see paragraphs 51-57 above). Further, this argument is not tenable on the facts as found, because the FTT has determined that the consultants provided their services to the NHS Trusts who used them as part and parcel of their own supplies to patients (FTT [115]). The consultants did not, on the FTT's findings, provide medical services to Mainpay, for onward supply to the NHS Trust. 83. I return to the findings by the FTT. The FTT concluded, based on the contractual arrangements and the circumstances in which the consultants worked, that the consultants were under the control, direction and supervision of the NHS Trusts for the duration of the assignment; they effectively became part and parcel of the NHS Trusts which themselves provided medical care to patients (FTT [115]). In consequence, and after detailed consideration of Mainpay’s submissions, it found that the essence of the supply was that of staff, rather than medical services (FTT [119]). The UT held that that was a conclusion to which the FTT was entitled to come, on the evidence before it and on the facts as found; as a matter of commercial and economic reality, Mainpay provided consultants (staff) to A&E, which consultants were on-supplied by A&E to the NHS Trusts, which Trusts used the consultants to provide medical care to their patients (UT [115]). I can find no fault in the approach of either the FTT or the UT. The short answer to Mr Firth's case is that it does not fit the facts as they have been found by the FTT. The commercial and economic reality is that Mainpay provides supplies of staff, not medical care, to A&E. …”
“It is not necessary to deal with the different or additional grounds relied on by HMRC in their Respondents’ Notice. Broadly, they are all facets of HMRC’s overarching contention, accepted by the FTT and the UT, that Mainpay was making taxable supplies of staff, not exempt supplies of medical services.”
“Like all exceptions to, and modifications of, the strict rule of precedent, this rule must only be applied in the most obvious of cases, and limited with great care. The basis of it is that the proposition in question must have been assumed, and not have been the subject of decision. That condition will almost always only be fulfilled when the point has not been expressly raised before the court and there has been no argument upon it … . And there may of course be cases, perhaps many cases, where a point has not been the subject of argument, but scrutiny of the judgment indicates that the court’s acceptance of the point went beyond mere assumption. Very little is likely to be required to draw that latter conclusion: because a later court will start from the position, encouraged by judicial comity, that its predecessor did indeed address all the matters essential for its decision.”
“As a general rule the only cases in which decisions should be held to have been given per incuriam are those of decisions given in ignorance or forgetfulness of some inconsistent statutory provision or of some authority binding on the court concerned: so that in such cases some part of the decision or some step in the reasoning on which it is based is found, on that account, to be demonstrably wrong. This definition is not necessarily exhaustive, but cases not strictly within it which can properly be held to have been decided per incuriam must, in our judgment, consistently with the stare decisis rule which is an essential feature of our law, be, in the language of Lord Greene M.R., of the rarest occurrence. In the present case it is not shown that any statutory provision or binding authority was overlooked, and while not excluding the possibility that in rare and exceptional cases a decision may properly be held to have been per incuriam on other grounds, we cannot regard this as such a case. As we have already said, it is, in our judgment, impossible to fasten upon any part of the decision under consideration or upon any step in the reasoning upon which the judgments were based and to say of it: ‘Here was a manifest slip or error.’ In our judgment, acceptance of the Attorney-General’s argument would necessarily involve the proposition that it is open to this court to disregard an earlier decision of its own or of a court of co-ordinate jurisdiction (at least in any case of significance or complexity) whenever it is made to appear that the court had not upon the earlier occasion had the benefit of the best argument that the researches and industry of counsel could provide. Such a proposition would, as it seems to us, open the way to numerous and costly attempts to re-open questions now held to be authoritatively decided. Although, as was pointed out in Young v. Bristol Aeroplane Co. Ld., a ‘full court’ of five judges of the Court of Appeal has no greater jurisdiction or higher authority than a normal division of the court consisting of three judges, we cannot help thinking that, if the Attorney-General’s argument were accepted, there would be a strong tendency in cases of public interest and importance, to invite a ‘full court’ in effect to usurp the function of the House of Lords and to reverse a previous decision of the Court of Appeal. Such a result would plainly be inconsistent with the maintenance of the principle of stare decisis in our courts.”
“… the concept of VAT supply is not coterminous with the concept of contractual duty, contracts which fully distribute the latter may be silent about the former. So it is here. In fact I would incline to accept [counsel for Reed]’s argument that taken as a whole the documents indicate that Reed was supplying nurses, not nursing services. However for the reasons I have given the case is not resolved in [counsel for Reed]’s favour, any more than in [counsel for the Commissioners’], simply upon the correct construction of [the] contracts. Although the contracts fully distribute [the] parties’ private law duties and rights, they do not put beyond question the nature of the supplies made by Reed, nor was it their function to do so. What those supplies were was accordingly a matter of fact for the Tribunal. That being the case, there is no proper basis on which this court should interfere with the Tribunal’s conclusions. On one reading of those conclusions … it may be thought that the Tribunal determined the case as a matter of construction of the documents, and I have held that their true construction is not determinative of the issue falling for decision. But I do not believe that that is the correct interpretation of the decision. Certainly they relied on the contracts; but in the end their decision rested on their overall view of the facts, which was that Reed supplied the nurses, who in turn supplied their services to the hospitals. That is a conclusion which cannot be faulted on Wednesbury grounds.”