Medhotels.com is understood to have started proceedings in the Court of Appeal to take the £7 million VAT case it lost this month to the Supreme Court.
Defending itself as Secret Hotels the bed bank saw an appeal brought by Her Majesty’s Revenue and Customs against an earlier decision upheld on December 3.
The case hinged on a period when Medhotels was owned by lastminute.com covering 2004 to 2007.
During this time the supplier switched from being an agent to a principal and back again in the aftermath of the death of two children who were Thomas Cook customers in Corfu.
At issue was whether Medhotels was acting as an agent or a principal and therefore liable to pay VAT under the Tour Operators Margin Scheme (Toms).
Damon Wright, director of VAT services at accountancy firm MacIntyre Hudson, said the Court of Appeal is expected to reject the bid to take the case on to the Supreme Court.
But he said that he expects Medhotels to approach the Supreme Court directly.
Opinion is divided as to the impact of the Medhotels case on the wider travel industry, with some experts saying the judgment as it stands undermines many existing business models.
Wright believes the ruling could have a fundamental impact on the way the industry operates.
He said after this month’s Court of Appeal ruling that “it could be very difficult for anyone other than a traditional travel agent, selling packages clearly on behalf of a named tour operator, to sell travel services to consumers without being liable for Toms Vat.”
Medhotels is now owned by Thomas Cook, which bought the brand name in 2008 but took on none of the liabilities of the ongoing VATcase.