Court of Appeal judgment in Heathrow WTO law and VAT case

27 May, 2021

The Court of Appeal has handed down judgment in Heathrow Airport Ltd & Ors v Her Majesty’s Treasury & Comrs for HM Revenue & Customs (Rev 1) [2021] EWCA Civ 783.

The case, which was listed in The Lawyer’s Top 20 Cases for 2021, concerned a judicial review of the HMRC’s and the Treasury’s decision to withdraw from two VAT schemes. The VAT Retail Export Scheme (known as the VAT RES) and the airside extra-statutory concession (known as the ESC), which provided for VAT-free shopping for visitors to the UK who were resident in a non-EU country and passengers travelling to a non-EU country respectively.

In deciding to abolish the schemes, HMRC and the Treasury relied on among other things their understanding of the UK’s WTO law obligations.

Heathrow Airport joined with Global Blue and World Duty Free in seeking a judicial review of the decision. They argued among other things that the Government had not taken some considerations into account and/or had erred, including pertaining to WTO law.

Lord Justice Green and Mrs Justice Whipple, sitting as a Divisional Court, dismissed the judicial review and, sitting as the Court of Appeal, dismissed an application for permission to appeal against an earlier refusal to allow the claimants to rely on other grounds for judicial review.

The findings of the judgment are important post-Brexit where public authorities choose to take WTO law into account in their decision-making. The judgment is the first extended consideration of the role of WTO law in this regard, post-Brexit.

A copy of the judgment can be found here.

Lucas Bastin, with Brendan McGurk and Jack Williams, led by Daniel Beard QC, instructed by William Robinson and Deba Das from Freshfields Bruckhaus Deringer, appeared for the Claimants.

Stephen Donnelly, with Naina Patel and Raj Desai, led by Eleni Mitrophanous QC, instructed by the Government Legal Department, appeared for the Defendants.