Healthwatch Hampshire – follow-up news
This Briefing should be read in conjunction with our initial Briefing on the Healthwatch Hampshire VAT case regarding supplies to local authorities.
We understand that HMRC has written to certain Healthwatch charities and NFP providers in respect of its interpretation of the case decision. It must be stressed that this is private correspondence and sets no precedent for organisations that have not received it and cannot be used in argument with HMRC. It is of general contextual interest. The contents can be summarised as follows:
- HMRC does not plan to appeal the decision
- It nonetheless does not agree with the tribunal’s decision
- It will treat income arising under the circumstances arising in the case as outside the scope of VAT despite the tribunal deciding it was consideration for supplies
- HMRC requires this treatment to be followed and does not suggest or imply that the supplier of the services even has the choice to follow the Healthwatch Hampshire decision
- It invites a party that disagrees with this to appeal
Unfortunately, we cannot share this correspondence with anyone as it was provided in confidence.
In our view the impression conveyed by HMRC that it can ignore a decision that it is not minded to appeal, and simply invite a party in an essentially identical position to go to the expense of appealing against its policy, is unfortunate, or worse. If HMRC disagrees, it is our view that it should have appealed. However, it is not obliged to do so. This is an unsatisfactory state of affairs which CTG will monitor. We welcome any feedback from readers which may inform any step we may consider taking on this issue.
Graham Elliott is CTG’s Technical Adviser
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