Mytravel Group Plc (formerly Airtours Plc) v Commissioners of Customs and Excise

Facts

MyTravel Group plc, formerly Airtours plc, is a tour operator required to account for VAT on designated travel services under the Tour Operators Margin Scheme, set out in Customs Notice 709/5, parts of which have the force of law. The scheme's primary "single method" applies to all supplies wherever enjoyed, but an operator may elect to calculate separately supplies enjoyed wholly outside the European Community. Following the tribunal decision in Aspro Travel Ltd v CCE, upheld by Keene J, an election under the 1988 Notice could be made at the time of the annual adjustment; the 1996 Notice instead required any switch, or reversion, to be notified at the start of the financial year, with no retrospective permission. The Commissioners allowed MyTravel to elect retrospectively for 1994/95. For 1995/96 and 1996/97 it submitted annual adjustments using the separated supplies method without seeking permission, and from 1 October 1996 filed provisional returns on that basis. On 20 December 2000 it submitted the adjustments for 1997/98 and 1998/99 using the single method. The Commissioners assessed it to £1,042,425 for 1997/98 and £1,081,389 for 1998/99, being the difference between the two methods. MyTravel appealed to the tribunal, contending that the timing provisions were ultra vires and incompatible with Community law.