The Company of Proprietors of Whitchurch Bridge, R (on the application of) v HM Treasury

A statutory tax exemption may apply to later taxes where its language and purpose support that construction. It does not, without clear language, exempt a person from the economic burden of a tax for which another person is legally liable.

A later VAT refund scheme cannot enlarge an earlier statutory exemption. Decisions on admission to such a scheme concern national financial policy, and the courts should exercise great caution before interfering with the Treasury’s criteria.

The claimant, a statutory bridge company, sought judicial review of HM Treasury’s refusal to specify it under section 33(3)(k) of the Value Added Tax Act 1994. The scheme refunds VAT incurred by specified non-registered bodies on non-business supplies.

The claimant relied on section 42 of the Whitchurch Bridge Act 1792, which exempted the bridge and its tolls from rates, taxes and duties. The issues were whether that exemption covered VAT charged by suppliers and whether it required the Treasury to exercise its section 33 discretion in the claimant’s favour.

1. Claim dismissed. The Treasury was not legally obliged to specify the claimant under section 33(3)(k) of the Value Added Tax Act 1994.

2. The principle that legislation is “always speaking” applies to statutory tax exemptions. Associated Newspapers Ltd v Corporation of the City of London [1916] 2 AC 429, Sir Reginald Pole Carew v G J Craddock 7 TC 157 and Sinclair v Cadbury Bros Ltd 18 TC 157 showed that an exemption may extend to later taxes if the statutory language covers them.

3. Section 42 of the Whitchurch Bridge Act 1792 exempted the bridge, associated property and tolls from rates, taxes and duties for which the Company would itself otherwise be liable. It did not extend to the economic burden of taxes legally payable by suppliers and reflected in their prices.

4. The later section 33 refund scheme could not enlarge the 1792 exemption or imply that the Company should benefit from a scheme introduced later. Parliament could have granted such relief in 1792 but did not do so.

5. Following R v HM Treasury, ex parte Service Authority for the National Crime Squad [2000] STC 638, the criteria for specifying a body under section 33(3)(k), and their application, were matters of national financial policy. The Treasury’s criteria were unobjectionable, and the claimant failed the requirement concerning power to levy local taxation or a local precept.

6. The court assumed, without deciding, that the Company was not excluded by section 33(1)(b), since that issue was not argued.