Jurisdiction(s):
United Kingdom

UK Supreme Court: NHS Trust car parking subject to VAT; guidance not a special legal regime; non-taxation significantly distorts competition

Published on: 30 October 2025

Published by a LexisNexis Tax expert

Legal News

Article summary

Background

This appeal considers whether VAT ought to have been levied on the Trust’s provision of car parking facilities. As a general rule, VAT is imposed on supplies of goods and services in the usual way. However, Article 13 of Directive 2006/112/EC (the Principal VAT Directive, PVD) together with section 41A of the Value Added Tax Act 1994 (VATA 1994) establish an exception for public bodies when they are acting as public authorities. A body is ‘acting as a public authority’ when it operates under a SLR. An SLR arises either where the public body is required by law to carry out the activity in a particular manner which does not apply to a private operator, or where the authority relies upon a specific public law power to perform the activity. If that exception applies, the public authority is not treated as a taxable person and therefore is not required to charge VAT on its relevant supplies of goods or services, unless regarding the authority as non-taxable would give rise to ‘significant distortions of competition’. The Trust offered paid-for car parking at a number of sites between May 2013 and...

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