NHS trust car park fees should be exempt from VAT

The taxpayer - an NHS trust - was obliged to provide parking for patients and visitors at a reasonable price.

HMRC considered that the charges should be subject to VAT because the taxpayer was a taxable person. The trust argued that the fees should be treated as non-business for VAT purposes as it was not a taxable person in relation to the supply and was operating as a public authority under a special legal regime. It also argued that that there would not be a distortion of competition if it were permitted to treat its car parking charges as non-business even though commercial operators are required to charge VAT on car parking.

The First-tier Tribunal and Upper Tribunal dismissed the taxpayer’s appeal.

The Court of Appeal noted that some 50 similar appeals by other NHS bodies were stayed behind the decision.

The court considered first whether by providing the car...