Mercy Global Consult Ltd (In Liquidation) v Abayomi Adegbuyi-Jackson & Ors
[2023] EWHC 749 (Ch)
Mercy Global Consult Limited (in liquidation) v Abayomi Adegbuyi-Jackson & Ors
4 October 2023
[2023] EWCA Civ 1073
Court of Appeal
A company was sued for £21 million in unpaid VAT. The defendants tried to argue the VAT was wrongly charged. The court said a previous case already settled this point, and they lost.
Key Facts
- •Mercy Global Consult Ltd (MGC) (in liquidation) claimed £21 million in under-declared VAT against various defendants.
- •Defendants sought to amend their defences with a 'VAT Defence', arguing MGC's supplies were VAT-exempt under VATA Schedule 9 Group 7.
- •MGC's business model involved employing healthcare professionals, seconding them to agencies, who then sub-seconded them to end-users (mostly NHS Trusts).
- •The High Court judge dismissed the amendment application, relying on the Court of Appeal's decision in *Mainpay Ltd v Revenue and Customs Commissioners*.
- •The defendants appealed, arguing the *Mainpay* decision was not binding.
Legal Principles
Distinction exists for VAT purposes between supplies of staff and supplies of services provided by those staff.
Mainpay Ltd v Revenue and Customs Commissioners [2022] EWCA Civ 1620
A subsequent court is not bound by a proposition of law assumed to be correct by an earlier court without argument or consideration.
Regina (Kadhim) v Brent London Borough Council Housing Benefit Review Board [2001] QB 955
Domestic VAT exemptions should be construed consistently with EU provisions as interpreted by the CJEU.
Various CJEU cases (implied)
A prior decision can be held per incuriam only in rare and exceptional cases with manifest slip or error.
Morelle Ltd v Wakeling [1955] 2 QB 379
Outcomes
Appeal dismissed.
*Mainpay* decision is binding; the distinction between supply of staff and supply of services is a fundamental point about the character of the supplies, regardless of the precise breadth of the exemptions.
Permission to amend defences refused.
The VAT Defence had no real prospect of success as it was precluded by the *Mainpay* decision.
Application for trial of preliminary issue refused.
This followed from the refusal to allow the amendment.
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