GSTS Pathology LLP & Ors, R (On the Application Of) v Revenue & Customs

GSTS Pathology LLP & Ors, R (On the Application Of) v Revenue & Customs

The claimants have a legitimate expectation, based on clear and unqualified HMRC rulings, that the VAT treatment of their pathology services will not change until three months after the tribunal's decision. There has been no change in law or authoritative court decision; only HMRC's internal view has changed. To implement the new VAT treatment before the tribunal's decision and a reasonable period for restructuring would be unfair and disproportionate, given the claimants' reliance and the absence of overriding public interest. Interim relief is therefore granted.

Parties
Claimant: GSTS Pathology LLP; Claimant: Serco Ltd; Claimant: Guy’s and St Thomas’ NHS Foundation Trust; Defendant: Commissioners for Revenue & Customs
Jurisdiction
England and Wales
Judgment Date
22 April 2013
Procedural Posture
Judicial Review / Interim Application for Injunction
Outcome
Interim injunction granted
Legal Topics
Legitimate Expectation, VAT Exemption, Judicial Review, Interim Relief
Administrative Law Tax Law Legitimate Expectation VAT Exemption Judicial Review Interim Relief

Case Brief

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Parties

GSTS Pathology LLP

Claimant

Serco Ltd

Claimant

Guy’s and St Thomas’ NHS Foundation Trust

Claimant

Commissioners for Revenue & Customs

Defendant

Procedural Posture

Judicial Review / Interim Application for Injunction

Legal Issues

  1. 1 Whether HMRC can implement a change in VAT treatment contrary to a prior ruling relied upon by the claimants without objective change in law or circumstances
  2. 2 Whether the claimants have a legitimate expectation that the VAT treatment will not change until after the tribunal decision and a reasonable period for restructuring
  3. 3 Whether interim relief should be granted to restrain HMRC from implementing its decision

Ratio Decidendi

The claimants have a legitimate expectation, based on clear and unqualified HMRC rulings, that the VAT treatment of their pathology services will not change until three months after the tribunal's decision. There has been no change in law or authoritative court decision; only HMRC's internal view has changed. To implement the new VAT treatment before the tribunal's decision and a reasonable period for restructuring would be unfair and disproportionate, given the claimants' reliance and the absence of overriding public interest. Interim relief is therefore granted.

Court Disposition

Interim injunction granted

Orders

  • HMRC is restrained from implementing its decision to treat GSTS's pathology services as VAT exempt until three months after the First Tier Tribunal's decision or further order.