Tell me, cldrvr, when you pay your income tax, and the allowance is say £7k, and your gross is say 20k, do you pay tax on 13k, or do you do the socially responsible thing as a proper citizen of the united republic of europe and pay tax on the whole 20k?
The latter is the morally correct way. On top of that, if you really want to occupy the moral high ground, you sell your plane and donate the proceeds to the next Bangladesh flood appeal (due in about 2 weeks' time, usually). Or give it to Greece. (I'd approve of that; I fly there often; love the islands).
What a complete load of bollox about a "loophole". The UK signed a treaty called ICAO, which according to my very nearly (thankfully) forgotten JAA IR theory was signed in 1944 (or was it 1945, no WW2 ended then didn't it...) and this treaty permits aircraft to travel freely, subject to certain limits when operating commercially. Almost all countries have signed it. Most civilised countries have implemented it to a reasonable degree for private ops, and with a tight oversight regime for commercial ops.
Everybody knows the sensible way to approach this issue: align the Euro and the FAA systems. Nobody actually wants to be on the N-reg. It's a hassle.
Why don't the euro communists do that? Because aviation regulation here is little to do with safety. It's all to do with job protection, job creation, organised labour related working practices, all that kind of crap. Most of the people involved are too short sighted to see beyond the end of their nose. And you are one of them. No doubt, if you park your jet next to another jet which is bigger and has a toilet which can be externally emptied, you will go all green with envy and sneak up to it and loosen its landing gear brake hoses.