Airtours Holiday Transport Limited (formerly) My Travel Group v Her Majesty's Revenue & Customs

Facts

The appellant, Airtours Holiday Transport Limited (formerly My Travel Group PLC), appealed against assessments totalling just over £1 million issued by the respondents to recover what they said was over-claimed input tax; the calculations themselves were not in dispute. The disputed input tax was wholly made up of VAT charged by Pricewaterhouse Coopers, first the partnership and later the LLP, for professional services: liaising with and making representations to the appellant's banks, creditors and bondholders, carrying out a strategic review of its business and restructuring proposals, liaising with the Civil Aviation Authority, and creating what was termed an entity priority model. In 2002 the appellant faced a financial crisis threatening its existence: it was indebted to banks and other financial institutions and had issued unsubordinated bonds amounting to finance of over £2 billion, and accounting difficulties it had announced caused a collapse in its share price, leading some banks to refuse to allow it to draw down funds. A rescue package became necessary and the banks formed a steering committee led by two Joint Lead Co-ordinators. Five engagement letters were addressed to the "Engaging Institutions" but signed by the appellant, which was responsible for PwC's fees. The appellant claimed the input tax; the respondents assessed to recover it, contending the supply was made only to the institutions.