Northumbria Healthcare NHS Foundation Trust v Revenue and Customs Commissioners

Value added tax – Input tax. The provision of the cars by the taxpayer NHS Trust to its employees under a salary sacrifice scheme (the car scheme) could not be regarded as a supply of services because it had been de-supplied by the Value Added Tax (Treatment of Transactions) Order 1992, SI 1992/630. It followed that the leasing of the cars by the Trust could not be an economic activity because that required a supply of services. However, pursuant to s 41(3) of the Value Added Tax Act 1994 and para 3 of the Contracted Out Services Direction, the four-year limit imposed by the Revenue and Customs Commissioners was reasonable. Consequently, the Upper Tribunal (Tax Chamber) allowed the Trust's claim for recovery of all of the VAT incurred in relation to the car scheme but limited the claim to the period from 1 October 2012 to 31 January 2017.

Category: