Supplies of car parking by hospital

The taxpayer an NHS trust was obliged to provide parking for patients and visitors at a reasonable price. It offered free parking to some hospital users and trust staff paid reduced rates.

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 found against the authority so it appealed to the Upper Tribunal.

The Upper Tribunal agreed with the First-tier Tribunal.

On the...