Zero-VAT route via Denmark - how does it work?

IO540 · 3rd Jul 2006, 17:21

This is widely used on aircraft, and other sizeable items, to strip the VAT off the item. This yields a "VAT paid" status, and a certificate of free circulation from Denmark. An intermediary is involved who charges a hefty fee.

Today I was speaking to my accountant about this, and he can't see how it can work, because in the UK the Revenue has the power (since a test case c. 1979 I think) to disregard any series of transactions if they don't have a real commercial purpose.

I can see this Denmark route would work safely on the initial purchase (i.e. you buy the plane from a Danish seller, to start with) but I can't see how anybody can use it to zero-VAT a plane they already own.

Confabulous · 3rd Jul 2006, 18:07

Actually that's a fair point - I see plenty of 'No VAT' aircraft advertised in Flyer and the like - seems a tad dodgy to me

Colonel Panic · 3rd Jul 2006, 18:56

Surely the VAST majority of these "No VAT" adverts are in respect of aircraft owned and operated by individuals / non VAT registered organisations, and as such they can not charge VAT on the aircraft's sale. I don't think that there's anything untoward there!

mm_flynn · 3rd Jul 2006, 21:45

IO 540,

The Danish route is for importing an aircraft into the EU. As far as I am aware this had nothing to do with an aircraft already in free circulation. It could be used for an aircraft already owned by yourself, but never having been operated in the EU.

flyingfemme · 4th Jul 2006, 07:14

Quote:

Originally Posted by IO540

I can see this Denmark route would work safely on the initial purchase (i.e. you buy the plane from a Danish seller, to start with) but I can't see how anybody can use it to zero-VAT a plane they already own.

It's a planning thing.....you decide, before you buy, what you want to do. You employ a Danish lawyer (I know a good one) and they buy the aircraft. They register it, ferry it to Denmark and import it. Then they sell it to you.
VAT on aircraft is a spiteful, communist thing; it is never applied to the big boys or the really rich because aircraft over 8 tonnes are exempt. So it's only the little guys (perceived to be well-off), who do not have a business import route, who have to pay. A small number of people pay a large amount of tax and an even larger amount of taxpayers money is spent persecuting them.

MEON VALLEY FLYER · 4th Jul 2006, 07:29

and just try talking to customs and revenue about how your import is classed, when it's not a standard item. you speak to 3 different offices and get different answers.

is an O2-A currently flying state side on the N reg military surplus or not ?

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