IO540 makes the point that there is no point in registering for VAT, since any reclaim on purchases is nullified by the need to charge it out on sales invoices to group members, and indeed as I originally stated, the exercise is entirely revenue neutral from that point of view. However it should be remembered that you are initially effectively purchasing the aircraft at a 17 and a 1/2 per cent discount which does not have to be repaid until the aircraft is resold. This is effectively an interest free loan of many thousands of pounds from the government for the duration of ownership of the aircraft, and there are not many loans of that sort around, least of all from HMG.
Careful selection of group invoice dates relative to VAT return dates can also result in substantial VAT reclaims on purchases whilst at the same time delaying VAT payments to HMRC. Again a perfectly legitimate interest free loan from HMG.