Ironically it was Southampton HMRC who we would have to deal with as we come under them too. IIRC, the Auditors did also establish what the true cost of purchasing that flight would have been.

The monetary sum the airlines put on the value of each mile is (I think) simply to show a low value on their liabilities regarding the millions of unredeemed miles out there. It is very easy to show their valuation is simply ludicrous when you price up a J return to IAD. As far as our Auditors were concerned, my company purchased an airline ticket from me at a true value. I don't argue with them, they happily passed it off...it is their reputaion with HMRC that is at stake.