In HMRC v Airtours Holiday Transport Ltd (Upper Tribunal – 19 November) a large holiday company suffered financial difficulties and agreed that a major accountancy firm (P) should liaise on its behalf with its banks bondholders and other creditors and prepare a detailed report on its financial status. The company reclaimed input tax in respect of the relevant supplies. HMRC issued assessments to recover the tax on the basis that the supplies had actually been made to the company’s creditors rather than to the company itself. The Upper Tribunal upheld the assessments distinguishing C & E Commrs v Redrow Group plc [1999] STC 161 and finding that the company’s creditors had ‘first approached (P) and contracted for the work and therefore authorised it’.
Why it matters: The Upper Tribunal has upheld the principles laid down by the House of Lords...
