5 April 2015
The appeal by Airtours Holidays Transport Ltd  EWCA Civ 1033 against the ruling of the Court of Appeal will be heard by the Supreme Court. The company is seeking input VAT recovery on an independent financial appraisal of its business, which was required by the funding banks but was paid for by Airtours which wished to restructure its debt.
The contract was between PWC the service provider and both Airtours and the banks, and Airtours has argued consistently that it was involved in the receipt of a service under the agreement and not merely the receipt of a benefit. By virtue of the earlier House of Lords judgment in Redrow, it should therefore be entitled to recover the VAT. However, the Supreme Court may take the opportunity to clarify some points arising from Redrow and the outcome is awaited with interest.
The request for permission to appeal to the Supreme Court in the earlier case of BAA Ltd  EWCA Civ 112 was refused. This related to the slightly different question of whether take over costs had a direct and immediate link to the trading activities, although the scenarios are similar. A further case in the broad area of “holding company costs” has been heard in the CJEU, and the opinion of the Advocate General is covered above.