This was an appeal to the First-tier Tribunal (FTT) following an assessment issued by HMRC for £10.7m. Between 2004 and 2020, the appellant procured airline pilot training for trainee pilots and placed qualified pilots with commercial airlines in return for a ‘placement fee’ equal to the cost of the cadets' training. The trainees were required to deposit a ‘security bond’, equal to the cost of their training, with the appellant. On completion of their training and placement, the appellant would transfer the bond to the airline. The appellant accounted for VAT on the placement fees paid to it by the airlines but did not account for VAT on the security bonds deposited by cadets. Some of the training took place outside the UK. 

The appellant contended that the bonds deposited by trainees were security for the costs it incurred to ensure that the trainees would undertake and complete the training course and, therefore, were not