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Upper Tribunal makes important ruling on whether UK tax legislation infringes EU principle of fiscal neutrality having regard to position of UK devolved legislatures in relation to welfare

Published: Thursday 21 February 2019

Commissioners for HM Revenue and Customs v The Learning Centre (Romford) Ltd and LIFE Services Ltd [2019] UKUT 0002 (TCC)

Jonathan Davey QC has been successful in an important Upper Tribunal appeal regarding whether provisions of the Value Added Tax Act 1994, which provide an exemption from VAT for certain welfare services, infringe the EU principle of fiscal neutrality. The Upper Tribunal (Mr Justice Nugee and Judge Timothy Herrington) overturned two decisions of the First-tier Tribunal (Judge Barbara Mosedale ([2017] UKFTT 0492 (TC)); Judge Charles Hellier ([2016] UKFTT 444 (TC))) in holding that the UK legislation did not infringe the relevant EU law jurisprudence. The factual context of the cases was that of the provision of day care services to adults with learning disabilities by private entities providing such services for profit. The key issue in dispute was that of whether or not the fact that the provision of such services by such entities is regulated in Scotland and Northern Ireland, but not in England and Wales, involves impermissible differing treatment across the devolved nations of the UK. The Upper Tribunal found that it did not.

The full judgment can be downloaded here.