Tribunal Dismisses Cascade Care VAT Exemption Appeal on Welsh Regulated Services Under VATA 1994

Cascade Care Ltd – FTT Ruling on VAT Exemption for Residential and Supported Living Services in Wales

• The First-tier Tribunal (FTT) ruled that Cascade Care Ltd’s specialist residential and supported living services for adults with mental health needs are exempt from VAT, confirming that such services fall under the definition of welfare services provided by state-regulated institutions as per VAT legislation.
• The taxpayer contended that Care Inspectorate Wales (CIW) regulations did not qualify under existing definitions; however, the FTT identified an obvious drafting error in the legislation that necessitated reading in provisions for the National Assembly for Wales, thus affirming the exemption.
• Even without correcting the drafting error, the FTT noted that the principle of conforming interpretation would support HMRC’s position, ultimately leading to the dismissal of Cascade’s appeal regarding VAT liability.

Source KPMG

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• Cascade Care Ltd appealed HMRC’s decision that its specialist care services in Wales are VAT exempt under the Value Added Tax Act 1994, Schedule 9, Group 7, item 9.
• Cascade argued that, due to the omission of the Welsh Assembly from Note 8, its Welsh services should be standard-rated for VAT.
• The Tribunal considered statutory interpretation, relevant case law (Inco Europe Ltd, Marleasing), and the principle of fiscal neutrality.
• The Tribunal dismissed the appeal, confirming that the VAT exemption applies to Cascade’s services in Wales.

Source: bailii.org

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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