Cert for Vat paid

[Bearcat]

hi..bought a 1950s cub last year where the vat was paid....should i want to resell the aircraft someone mentioned to me that did I have an form stating the vat was paid from the inland revenue. I didnt think of this at the time when buying the cub and would like my paper work re finances in order....can you advise?

[Pronto]

First things first. VAT is dealt with by HM Customs and Excise, not the Inland Revenue. (That said, after about April 2005, the two departments are expected to merge to form HM Revenue and Customs).

Secondly, as I understand it, VAT is only payable if the seller is VAT registered. If you are the buyer, then you pay the VAT to the seller who must account for the VAT element of the purchase price to HMCE. Your purchase invoice should show the sellers VAT Registration number. The amount of VAT is usually shown seperately on the invoice.

If you've been charged VAT and it's not shown on the invoice or the VAT number is missing, suspect fraud and advise HM Customs who will happily attend to the fraudster. HMCE are contactable on 0845 010 9000.

When the aircraft is valued for insurance purposes, you should be aware that the valuation is usually the purchase price
without the VAT element. An acquaintance of mine bought an aircraft a few years ago (and paid VAT on the purchase). A few months later, it was written off after his co-owner tried to land in a field that was too short for it. The insurance paid out the valuation (ie the purchase price) not the VAT leaving my acquaintance out of pocket.

What I think your advisor is talking about is not about trying to get the VAT back when you come to sell the aircraft, it's about the tax authorities bid to ensure that goods imported into the EU have had VAT paid on them. Both duty and VAT are payable on goods permanently imported to the EU. The French Douanes are said to be particularly industrious here, though HMCE are also said to be active. They - certainly the French - target N Reg aircraft, check the docs and, if it seems that VAT hasn't been paid, will require the production of a VAT receipt. They may impound the aircraft until the certificate is produced.

The VAT receipt they're particularly interested in is the one which shows VAT being paid when the aircraft was first imported permanently into the EU. How you go on if the aircraft was imported before 1973 (when VAT was introduced - replacing Purchase Tax) I couldn't say.

The people that the authorities appear to be after are those people who've imported an N Reg under the temporary importation regime (under which no VAT or duty are payable) but intend to keep it permanently in the EU. If the aircraft is imported under TI, it has to leave the EU after a set period otherwise VAT and duty are payable.

I haven't heard of any tax authority challenging a G registration aircraft regarding payment of VAT but, as always, am prepared to be corrected.

If you're concerned about the VAT position regarding your aircraft I suggest having a word with HMCE for advice.

[david viewing]

I got a 'free circulation' vat certificate from HM C&E at Compass House, Romsey Road Southampton SO16 4HP after reading an earlier post. They didn't need any evidence of vat actually being paid because the aircraft had been in UK for 10 yrs or so, which would seem to take care of the 1973 case.

This certificate is supposed to have the same effect on Douaniers as sunlight on Michael Howard. But don't delay - this particular office is being closed down.

[Bearcat]

chaps I really really appreciate your postings...as a prof pilot I am as thick as brick when it comes to tax, vat etc....any more thoughts are welcome and thank you pronto...

[Aim Far]

As David W said, the C&E Southampton office is being closed. The guy who was really helpful to me last year regarding a certificate of free circulation has left and set up his own consultancy. Details as follows:

Clive Chapman
Forest Aviation Services Ltd
Oakland House
17 Butts Ash Avenue
Dibden Purlieu
Southampton
SO45 3RB
Tel +44 (0)2380-879670
Fax +44 (0)2380-849244
Mob +44 (0)7952-373865

Mods - if this is inappropriate, please just remove it - but he was very helpful.

[UV]

Bearcat
its even easier than talking to the people in Southampton.
There will be a Customs official alloacted to your airfield or strip, and he will be able to issue said certificate.
Ask at the airfield, or ask the strip owner for details.
UV