Between 2004 and 2020, Airline Placement Limited (APL) operated as an intermediary, procuring training for trainee pilots and the placing the qualified pilots with sponsor airlines such as British Airways, easyJet and Virgin Atlantic.

APL’s business model involved receiving a placement fee from sponsor airlines, equivalent to the cost of the cadets’ training which took place in other countries, mostly New Zealand.

A special financial structure underlined this arrangement with trainees required to deposit a ‘security bond’ with APL, equivalent to the cost of their training. This bond served as a safeguard for APL, ensuring cadets completed their training programmes.

Upon successful placement with a sponsor airline, APL transferred the bond to the airline. While APL accounted for VAT on the placement fees paid by sponsor airlines, it did not account for VAT on the trainee pilots’ security bonds.