Buying New

[JoshCritchley]

I posted a little while ago about how much I liked the Citabria. I'm now thinking of clubbing together with a friend(s) and buying a new one.

The VAT is a real stinger though and I understand that it may be possible to recover the tax if you buy it through a company. Has anyone got any experience of this?

And does anyone have any experience of buying from new in terms of maintenance costs? Am I right to think they should be lower?

Cheers.

:D

[Oscar Duece]

VAT yes we all hate paying it. You will have to pay VAT not only on the plane (based on cost price if new) but also the shippping costs.
I assume you we be putting it on the G reg, if not forget it you can't claim the VAT as input (cos you don't own the plane legally, the trust or US bod does).

As for claiming any VAT back on imports (something I do all the time) . Be it a plane, car, boat or blow up doll. It must be used for some business use afterwards. Otherwise whats left of the Customs and Excise force will look into you and everything you've done since you started shaving. (know someone who's been to the high court with them and is now trying to raise 160 K to keep his liberty).

So its best done with an existing business. Otherwise you are going to have to rent the plane out and charge VAt on such, to every pilot, even yourself. Yes you claim it back on Fuel, maintainance and other rated costs. But would it work out cheaper in the long run.

The short answer would be to operate it as a business for a period, say 3 years. Advertise it for hire (but you could make the conditions or costs prohibative for others). Charge the company lots of interest for the loan to buy the plane, plus management fees etc. Then when the company hasn't made a bean in that time, declare it insolvent and sell the plane back to yourselves for it book value (you can depreciate it at 25 % per year).

All in all a lot of hasle to save what £ 20k tops. Besides with the wierd VAt issues on selling used planes, you could pass that on to the next owner. ??

[Flyin'Dutch']

It is alleged that there is no VAT on aircraft in Denmark.

;)

FD

[FNG]

ChiSau, I am not looking for a share at present, but, if you do buy a Citabria and decide to put it on a public C of A for rental, near London, I'd be a willing punter, and I can think of others who might be also. Good luck with your purchase

[Evo]

if you do buiy a Citabria and decide to put it on a public C of A for rental, near London, I'd be a willing punter, and I can think of others who might be also.


I would...! :)

[IO540]

Oscar Duece

I think your drift re VAT is right... You can later buy the plane off the firm at the then market value. The company also has to repay the VAT at that point, but that's also calculated on the then market value. No need to liquidate the company as such. There may be a better way...

But it IS definitely worth trying to get the VAT back as the VAT on a new plane will pay for several years' flying!

Another angle is that instead of setting up a conventional syndicate, place the plane in a ltd co and rent it out to the other people (and to yourself of course). Aim to make a surplus, which you have to anyway to build the engine/prop fund etc. Then it's a business, and you claim back the VAT.

You do have to charge yourself the same rate as you charge others that fly it; this is a Inland Revenue requirement to avoid benefit in kind charge on private use of a corporate owned asset.

edited to add: The VAT registered company will have to charge VAT to its customers, but the total price charged to an individual will be no higher than if it wasn't VAT registered, because if it wasn't, it would have to pay VAT on its inputs which it cannot reclaim from C&E.

The advantage of NOT VAT registering is when e.g. a plumber isn't which gives him a slight competitive advantage because he doesn't have to charge VAT on the labour element of his supplies... this is irrelevant to the scenario discussed here.

[JoshCritchley]

Thanks guys. IO540 - keep the advice coming! Great stuff!

If people are serious about wanting to rent it, do let me know. I need to sit down and work the sums out, but it would be useful to know the kind of demand there is out there for a new aerobatic/touring tailwheel based v near London.

It seems odd that its possible to do a tailwheel conversion but then not find an aeroplane to rent - but being pretty new to all this I'm probably missing the blindingly obvious.

:confused:

[FNG]

I think that there would be a solo rental market for a well presented aerobatic tailwheel trainer/tourer in the South East. You would need to have one or two very good tailwheel/aeros instructors to vet potential renters (I can think of a couple of names if you are interested). I would suggest that careful vetting would be a better option than, eg minimum 100 tailwheel hours, as aptitude and attitude matter more than hours in any event. Having potential renters converted to tailwheel by your instructors ought to be a reasonable guarantee that their tailwheel tick has been done properly. Finding a suitable base with hangarage would not be easy, but there are some spaces available, particularly if you hook up with a club or maintenance organisation. I was involved in setting up a group to acquire an aerobatic trainer/tourer for public C of A operation (although that aircraft is not solo rented), so PM me if you want to discuss the idea.

[Lomcovaks]

Hi

I've got a 1973 Bellanca Citabria.


http://www.apwv81.dsl.pipex.com/001.jpg


Rebuilt airframe and recovered in 2001.
Factory exchanged 0-320 B2B 160HP two years ago with 174hrs.
Kept in her own hangar on an uncontrolled airfield.

I'm considering taking on the right flying partner to share the fixed costs and enjoy the aircraft.

check out

www.apwv81.dsl.pipex.com/Italy

for a web photo album of my tour of Italy last year or wait for June's Pilot magazine for a touring article.

Anybody interested?
http://www.apwv81.dsl.pipex.com/002.jpg

[FNG]

Lomcovaks, check your PMs.