31 October 2025
Northumbria Healthcare NHS Foundation Trust (the Trust) considered that its provision of paid-for hospital car parking was not chargeable to VAT. HMRC disagreed, and the First-tier Tribunal (FTT) and then the Upper Tribunal dismissed the Trust’s appeals. The Court of Appeal found in favour of the Trust on the basis that the Trust was not a taxable person in respect of this activity as it was acting as a public authority under a ‘special legal regime’, and that this would not lead to a significant distortion of competition. The Supreme Court has overturned this judgment.
When determining whether a public body is acting under a special legal regime, the question is whether there is a legal obligation that governs or materially affects the way the body’s activity must be carried out. The Department of Health guidance on hospital car parks that the Trust followed did not impose legal obligations. Accordingly, the Supreme Court concluded that the Trust was not acting under a special legal regime. Given this finding, the distortion of competition point did not arise, but the Court went on to address it, and found that to treat the Trust as non-taxable would distort competition. The car parking was not restricted to hospital users, and the FTT had found that there was actual competition between the Trust’s car parks and nearby parking provided by private operators. This conclusion was one that the FTT was entitled to reach on the evidence before it. HMRC’s appeal was allowed. (Contact: Andrew Clarke)
On 25 October 2025, the House of Commons Treasury Committee (Chair: Dame Meg Hillier MP) published a report looking at Cash Individual Savings Accounts (Cash ISAs). The report is a follow-up to the Committee’s report of June 2025 looking into the Lifetime ISA and focuses on calls to reduce the maximum annual amount an individual can contribute into a Cash ISA with a view to persuading people to invest more in stocks and shares. The Committee concludes that a reduction in Cash ISA limits would be “unlikely to drive a significant transfer of cash savings into investment products”. The Committee recommends instead that HM Treasury “prioritise measures to promote financial inclusion, literacy and awareness and to improve access to advice and guidance”.
The First-tier Tribunal has allowed an individual taxpayer’s appeal in Boulting v HMRC, concerning section 1033 Corporation Tax Act 2010. If conditions are met, section 1033 can allow for a share buyback by an unquoted trading company or holding company of a trading group from a seller substantially reducing their interest to be taxed as a capital gain instead of as a company distribution subject to income tax. The dispute centred on whether a purchase of own shares, made in connection with the taxpayer’s exit from a business, was made wholly or mainly for the purpose of benefiting a trade: a key requirement of Condition A of section 1033.
HMRC had earlier granted a clearance that section 1033 would apply; however, they subsequently considered it void based on HMRC’s view that the share value used was materially greater than market value and this had not been disclosed in the clearance application. After reviewing the facts and circumstances, and after careful consideration of witness evidence on how the final valuation arose from negotiations and why it was acceptable to the company, the FTT agreed with the taxpayer that the company’s purpose was for the benefit of the trade, i.e. to secure the taxpayer’s exit to resolve management disputes, and not for other purposes alleged by HMRC such as rewarding the taxpayer for his past involvement. The FTT concluded that the conditions of section 1033, including Condition A, were met resulting in the intended capital gains tax and entrepreneurs’ relief treatment for the shareholder.
The next EMEA Dbriefs tax webcast is on Wednesday 5 November 2025 at 12.00 GMT/13.00 CET. In Achieving practical transfer pricing certainty through ICAP: Insights and discussion with HMRC, hosted by Jamie Bedford, our panel will explore the practicalities, benefits, and limitations of the International Compliance Assurance Programme (ICAP), which offers qualifying businesses a proactive route to achieving practical certainty on cross-border activities with multiple tax authorities simultaneously. The discussion will include senior HMRC guest speakers who lead on ICAP, giving a window into HMRC’s perspective, current priorities, and learnings from past ICAP cases.