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Old 3rd November 2006 | 21:44
  #15 (permalink)  
IO540
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From: EuroGA.org
Can you really claim against anybody if HMRC do you for VAT? After all, it is a manoeuver with no commercial basis and as such HMRC have the theoretical power to set it aside. I would guess they might try that if the eventual owner was in some way involved or connected with the aircraft before finally purchasing it from the Danish owner.

I wonder if there is any way to do this: you are a UK based ltd co., VAT registered, own a plane, and you wish to sell the plane to a customer who isn't VAT registered, and do it such that he doesn't have to pay the 17.5% extra. Is it possible to sell the plane to a Danish owner (being in the EU, and assuming this Danish owner supplies a VAT number, this sales invoice would not as per standard export practice have VAT on it) and have the new owner buy it from the Danish chap?

I have no use for this myself but I am curious. There are currently, in effect, two separate aircraft markets: (1) those for VAT registered customers, and (2) those for non VAT registered customers. If you are a VAT registered company and want to sell your plane, you are not likely to attract many customers in (2) because they will pay the 17.5% extra and won't be able to get it back.
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