TC09595 - [2025] UKFTT 00894 (TC)

Fecha: 12-Jun-2025

Contractual Arrangements

Contractual Arrangements

57.

The contractual arrangements underpinning the STP were:

(1)

a “Placement Contract” between APL (or its predecessor) and a Sponsor Airline under which APL agreed to provide trained cadets to the airline in consideration for the payment of a placement fee (the amount of which depended on particular requirements of the Sponsor Airline. easyJet paid a placement fee of £69,000, BA paid a placement fee of £84,000 and Virgin paid a placement fee of £109,000).

(2)

a “Conditional Employment Contract” between the cadet and a Sponsor Airline under which the Sponsor Airline offered the cadet employment conditional on the cadet successfully completing their training.

(3)

a “Services Contract” between APL and a flight training organisation (“FTO”) under which APL agreed to pay for the provision of training the cadet.

(4)

a “Sponsorship Agreement” between APL and the cadet under which APL agreed to procure the provision of training from the training provider and the cadet agreed to deposit a security bond equal to the net cost of the training.

(5)

a “Loan Agreement” as between the cadet and the Sponsor Airline.

58.

Save for the services contract between APL and L3AT&T, these arrangements were all arm’s length agreements between unconnected parties.

59.

Ms Shaw, in Appendix 1 to the ‘Appellant’s Note of Evidence’, helpfully set out the contractual terms to which we were referred and, as it is not disputed that these have the effect that APL contends (the issue between the parties concerns the economic and commercial reality of those contracts) we have included an adapted version of this as an Appendix to this decision.