Owain Thomas QC and Matthew Donmall appeared in the Supreme Court in Airtours Holiday Transport Ltd v HMRC.
In the Court of Appeal Owain, appearing for HMRC, succeeded in arguing that the VAT paid by Airtours on professional fees was third party consideration and could not be deducted. The case follows a long line of recent domestic and CJEU case law in the Supreme Court concerning the proper scope of third party consideration and where it sits in the VAT system. The issues of principle raised in the case included the proper approach to the construction of tripartite contracts and the implication of terms, whether the principle of fiscal neutrality has a role to play and whether consideration can be apportioned in third party cases.
The case was heard by the Supreme Court at the end of February and judgment is reserved.