Case Number: TC09733
By remote video/telephone hearing
Appeal reference: TC/2023/1176
VAT exemption pursuant to Group 7 Part 2 Schedule 9 VATA – carers in care homes – appeal dismissed
Judgment date: 16 December 2025
Before
TRIBUNAL JUDGE ROSA PETTIFER
JANE SHILLAKER
Between
TRUTH RECRUITMENT LIMITED
Appellant
and
THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS
Respondents
Representation:
For the Appellant: Mr Santoma Joel Ibeneche, a director of the Appellant
For the Respondents: Mr Colin Williams litigator of HM Revenue and Customs’ Solicitor’s Office
DECISION
Introduction
With the consent of the parties, the form of the hearing was video, attended by the Tribunal and the representatives on the Cloud Video Platform (on 15 August 2024) and on Microsoft Teams (on 14 May 2025). Face to face hearings were not held because it was not expedient to do so.
Prior notice of the hearings had been published on the gov.uk website, with information about how representatives of the media or members of the public could apply to join the hearings remotely in order to observe the proceedings. As such, the hearings were held in public.
In a letter dated 23 February 2023 HMRC amended the Appellant’s VAT return for the period 7/22 (the ‘Return’). In particular HMRC:
denied the majority of an input tax claim of £20,833.60 (revising it down to £159.66); and
amended the Return to show VAT due of £2,021.57.
pursuant to s73(1) and s73(2) Value Added Tax Act (‘VATA’).
The Appellant did not challenge these figures and so the issue of quantum was not before us as it was not in dispute.
Judge Pettifer delivered the Tribunal’s decision orally on 14 May 2025 dismissing the appeal. HMRC requested a full written findings and reasons which we now provide.
Procedural history
Prior to the hearing on the 15 August 2024 HMRC applied for further and better particulars of the Appellant’s appeal, which the Appellant subsequently provided.
The hearing on 15 August 2024 went part heard. That is because the Appellant made an oral application to amend its Statement of Case during that hearing. Judge Pettifer reserved her decision on that application and went on to allow the application and issued subsequent case management directions. The documents we were referred to for the reconvened hearing were: an amended court bundle of 88 pages; the Appellant’s ‘GROUNDS AGAINST HRMC [sic] REQUEST – VAT APPEAL’ of 26 pages; the ‘BUNDLE FOR VAT APPEAL – TRUTH’ of 10 pages; and an authorities bundle of 324 pages.
HMRC made a strike out application pursuant to Rule 8(3)(c) The Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 on the basis that there was no reasonable prospects of the Appellant’s case succeeding on 22 April 2025. We heard the Appellant’s objections to that application during the hearing on 14 May 2025. We refused HMRC’s application for strike out because we were not satisfied on the information before us that the Appellant’s appeal had no reasonable prospects of success. In particular we considered that there was a real possibility that Mr Ibeneche could give evidence that might determine the appeal in the Appellant’s favour (no witness statements had been directed for this appeal).
the law
S31 VATA exempts supplies that are listed in Part 2 Schedule 9 VATA, subject to non-relevant exceptions.
At the relevant time Item 1 Group 7 Part 2 Schedule 9 VATA provided in (potentially) relevant part:
The supply of services consisting in the provision of medical care by a person registered or enrolled in any of the following—
the register of medical practitioners;
…….
the register kept under the Health Professions Order 2001;
…….
the register of qualified nurses, midwives and nursing associates maintained under article 5 of the Nursing and Midwifery Order 2001.
…….
(‘Item 1’). Note 2 provides:
Paragraphs (a) to (d) of item 1 and paragraphs (a) and (b) of item 2 include supplies of services made by a person who is not registered or enrolled in any of the registers or rolls specified in those paragraphs where the services are wholly performed or directly supervised by a person who is so registered or enrolled.
(‘Note 2’).
At the relevant time Item 4 Group 7 Part 2 Schedule 9 VATA provided:
The provision of care or medical or surgical treatment and, in connection with it, the supply of any goods, in any hospital or state-regulated institution.
(‘Item 4’).
At the relevant time Item 9 Group 7 Part 2 Schedule 9 VATA provided:
The supply by—
a charity,
a state-regulated private welfare institution or agency, or
a public body,
of welfare services and of goods supplied in connection with those welfare services.
(‘Item 9’).
Item 10 Group 7 Part 2 Schedule 9 VATA (‘Item 10’) provides in broad terms an exemption from VAT for supplies that meet various criteria including that they are ‘incidental to the provision of spiritual welfare’.
In broad terms VATA permits HMRC to assess to the best of their judgment: VAT that has not been paid, see s73(1); or a repayment or refund of VAT or VAT credit that ought not to have been paid or credited, see s73(2). S73(4) VATA permits assessments under s73(1) and s73(2) VATA to be combined. Assessments pursuant to s73 must be made within prescribed time limits and notified to the person assessed, see s73(6) and s73(9) VATA.
The right of appeal against a s73(1) and s73(2) VATA assessment lies in s83(1)(p) VATA.
the issues and burden of proof
The first issue is whether the Appellant’s supplies are exempt from VAT pursuant to s31 and Group 7 Part 2 Schedule 9 VATA (‘Group 7’). If they do not fall within Group 7 then the Appellant’s supplies are standard-rated for VAT purposes. If the Appellant’s supplies are exempt then HMRC should not have amended the Return as set out above. If the Appellant’s supplies are not exempt then the amendments to the Return should stand. HMRC’s amendments to the Return are an assessment pursuant to s73(1), s73(2) and 73(4) VATA (the ‘Assessment’).
The second issue is whether any of the Appellant’s more general challenges (see below) to the Assessment succeed.
It is for the HMRC to show that the Assessment has been correctly issued ie there are no procedural defects.
It is for the Appellant to show that it is not liable for the Assessment.
The standard of proof is on the balance of probabilities.
the facts
Preliminary points
Mr Ibeneche provided a witness statement, he also gave oral evidence at the hearing and was cross-examined by Mr Williams. We found Mr Ibeneche to be a very straight-forward and honest witness and we are grateful to Mr Ibeneche for his evidence. Our findings of fact are from the documents supplied or the largely unchallenged evidence of Mr Ibeneche. Consequently, most of them require no discussion as they were not in dispute. Therefore, we have also incorporated Mr Ibeneche’s evidence in the findings of fact below rather than setting out separately the evidence provided.
Findings
The Appellant is a limited company that is registered for VAT.
The Appellant provides carers, including senior carers, to nursing and residential care homes (the ‘Carers’).
On 25 November 2022 HMRC commenced a compliance check into the Return. Following correspondence between the parties HMRC asked for further details about the Appellant’s supplies to:
Sahni Care Home;
Richmond Court Residential Home; and
Belvidere Residential Home.
(collectively the ‘Care Homes’). The compliance check resulted in the Assessment. We are satisfied that that there are no procedural defects with the Assessment ie it was validly issued.
In written correspondence between the parties the Appellant confirmed that the Carers did not provide any medical care (such as administering drugs or taking blood pressure) at any of the Care Homes. In his oral evidence (including under cross-examination) Mr Ibeneche clarified that the Carers did provide medication at the Care Homes: he had originally answered no as the Carers were not medically qualified and he was answering the question holistically. We accept that explanation and so find as fact that the Carers provided medication.
It was clear from the correspondence between the parties and Mr Ibeneche’s candid evidence that none of the Carers were registered or enrolled in any of the professions listed in Item 1. Nor did the Appellant’s supplies involve services wholly performed by or directly supervised by a person registered or enrolled in any of the professions listed in Item 1, see Note 2.
We neither heard nor saw any evidence (other than Mr Ibeneche’s simple statement set out at sub-paragraph 29(2) below) as to the other companies who supplied the Care Homes and so we make no findings about such supplies.
We accept that Mr Ibeneche had tried to contact HMRC for assistance in resolving the on-going issues the Appellant had with the Care Homes (see details below).
the parties’ arguments
The Appellant
The Appellant’s grounds of appeal were:
Its supplies ‘fall outside the VAT-oriented supplies’. [Although the Appellant did not identify a particular exemption.]
The Care Homes make exempt supplies and so the Appellant should not have to charge VAT on its supplies to them. Further, other companies supply the Care Homes and do not charge VAT.
The Appellant originally charged VAT on its supplies to Belvidere Care Home (to which the majority of the amendments to the Return relate). Subsequently, on the basis, that its supplies were exempt, Belvidere Care Homes recovered the VAT it had paid to the Appellant by ‘reducing [the Appellant’s] pay cheque for almost 13 months’. Mr Ibeneche submitted that HMRC as a public authority should/were in a position to help the Appellant resolve this commercial dispute.
The Assessment is unfair and irrational.
The Appellant had felt pressured following a phone call from HMRC to withdraw from the appeal.
HMRC
The focus of HMRC’s case was that the supplies by the Appellant to the Care Homes do not fall within Item 1 because:
the services must be carried out or directly supervised by a person registered or enrolled on the registers specified in Item 1; and
no medical care is provided.
HMRC’s position was also that the Appellant’s supplies were supplies of staff which do not fall under any of the items in Group 7.
discussion
Are the Appellant’s supplies exempt?
We deal with Item 1 first as that was the focus of submissions in the hearing. Because:
none of the Carers were registered or enrolled in any of the professions listed in Item 1;
nor did the Appellant’s supplies consist of services wholly performed by or directly supervised by a person registered or enrolled in any of the professions listed in Item 1, see Note 2;
we agree with HMRC that the Appellant’s supplies do not fall within Item 1 and therefore are not exempt from VAT. This means we do not need to make any finding about whether the Carers were providing ‘medical care’ for the purposes of Item 1.
There was nothing before us that allowed us to conclude that any other exemption applied. In particular: insofar as Item 4 we cannot conclude on the basis of the information and evidence we heard that the Appellant was supplying care rather than staff and therefore we do not need to consider whether question of whether the Carers provided ‘medical care’; the Appellant is not any of the bodies listed in Item 9 and so its supplies cannot be exempt under that item; nor did we see any evidence that the Appellant was providing care relating to spiritual welfare, see Item 10.
Do any of the Appellant’s other grounds of challenge to the Assessment succeed?
In relation to the Appellant’s ground at sub-paragraphs 29(2), 29(3) and 29(5) above we make the following points. First, whether a person’s supplies are exempt or not does not depend on the VAT treatment of the person they are supplying to. Put another way supplying a person who makes exempt supplies does not mean that your supplies are exempt. As set out above we made no findings about other companies’ supplies to the Care Homes and so we can make no findings in favour of the Appellant based on the treatment of other companies’ supplies to the Care Homes. Next, neither commercial disputes nor the tenor of phone calls during the course of proceedings are relevant to the question of whether a person’s supplies are exempt from VAT or not. Therefore, neither point is capable of defeating the Assessment and we make no findings in relation to them.
Part of the Appellant’s case, at sub-paragraph 29(4) above, was that the Assessment was unfair or irrational. Such a statement could go to whether the assessment was made to HMRC’s ‘best judgement’ or to whether the Appellant could establish a more general public law challenge to the Assessment. Both avenues would involve detailed consideration of the relevant case law and in respect of the latter a discussion about the jurisdiction of this Tribunal. However, in this appeal it is simpler to highlight that we made no findings of fact that HMRC’s behaviour was unfair or irrational because there was no objective evidence of that before us (we appreciate that subjectively this is not the case for the Appellant). That is sufficient to dispose of those parts of the Appellant’s arguments.
conclusion
For the reasons given above we dismiss the appeal.
Right to apply for permission to appeal
This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.
Release date: 16th DECEMBER 2025
