Originally Posted by
IO540
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.
On importing it is not without commercial basis. As I understand the rules - If you (A UK non-VAT registered entity) imported an aircraft and its point of entry was France, you then flew it around France for a week and then flew to the UK and declared it for import, the French would have a case that you failed to declare on import and owe them VAT and penalties. You can not put the aircraft to end use (i.e. just fly it around) until VAT is paid and the VAT is for the country of entry. This is why there is a theoretical risk going via Wick (HMR&C could argue the act of landing and refuelling was actually where the import should have occurred - However, as I said I am unaware of anyone coming to grief in this specific case).
The same logic goes for Denmark, you have arrived in the EU there you are now going to fly it around Europe at random (place it in Free Circulation) you are obligated to declare and pay VAT (which through rules I don't understand means that for some owning entities are at 0% VAT for used aircraft).
On your second point, I doubt it would work and certainly it would be worth HMR&C's time to lean heavily on those involved.
My point on liability insurance is - The cost of screwing up a complicated import process can be high, if you have used a professional advisor and followed his advice, yet the advice was wrong, you have a chance of recovering legal costs and penalties. Obviously you wouldn't expect PLI to pay the VAT as you would clearly owe it.