VAT on pre 1985 aircraft

[VORTIME]

Guys,

When purchasing a pre-1985 aircraft that has been in continuous EU circulation since it was built, are there any VAT concerns? Any documents required or is this, under article 28n sufficient alone not to have VAT paid document? Vendor docs don't exist...

VT

[SkyCamMK]

I have a similar problem with a boat and the latest is that the law will not change, the VAT receipt for my vessel would be my licence to travel in EU and if stopped and asked to produce it and failing it may result in vessel being impounded. HMRC are aware that it affects thousands of us and do not care too much because if we are caught re-entering the UK we can be charged 20% of the current value which is in many ways unfair especially for home-builds like mine. I have offered to pay the VAT on the original purchase but they will not accept it. They argue that until another "chargeable occurrence" happens they cannot charge and there has never been law about keeping or passing on receipts even though it is good practice. They operate a bureaucracy and there is no leeway. Basically it is unjust and unreasonable the way they are operating for boats and they have a Unit of Expertise that does not help people like me. Beware the VAT men and get a receipt!!! I continue to lobby and complain but they will not answer my emails or write anything down.

[mad_jock]

beat them at there own game then

Find a company with a VAT number "sell" them the plane for a nominal amount. Then buy it back off them including the VAT and a service fee. And hey presto you have a VAT receipt.

Failing that the dodgy way is just find a company that has gone out of business years ago and "generate" a VAT receipt. Personally I wouldn't do it this way because it is illegal but would be the cheapest easiest method.

[SkyCamMK]

Hi Mad Jock, a great theory but very risky in practice once ownership is transferred even if expected to be only temporary and could be classed as evasion rather than avoidance. HMRC used to issue letters following submission of the VAT receipts on items used to build it but will no longer do so following a court case. I have over £20k of receipts for everything from engine to sails and radar etc but they will not take them into account and the hull was moulded back in 1979 so was actually "deemed paid" for most of its life in the Netherlands but this does not impress our dear old revenue collectors who ironically are refusing to accept/collect from me. It drives one to thinking extreme thoughts of course but the world is full of jobsworths and others that hide from reality.

To OP, Good luck with your aircraft but it will likely bring you sleepless nights when you start travelling... I cannot risk visiting Channel Islands and it is so unfair.

[mad_jock]

I agree on boats it can be a bit of a sod and they really have a thing about them.

But for a light aircraft if you wait until just before an engine change strip out the avionics and send the engine in. The hull value is relatively little on a light aircraft minus engine and newish avionics which you have receipt for so you could do it at market value.

Then get it back and do the engine change put the avionics back. Then you have the aircraft back with a VAT receipt for the hull and one for the engine.

For a 15k Cessna I reckon you could get it sorted for 750-1k VAT bill on the hull. Maybe less if it hasn't had the SID's done on it yet.

[englishal]

You are ok due to E.E.C. Council Directive 92/111, part of the Sixth Directive, Article 28N- Transitional measures.

In my experience a copy of the CAA register print out, together with the new US registration document (which should tie in with the de-registration date) is enough evidence to prove the aircraft’s status in this situation.

HMRC no longer issue Free Circulation Certificates as they had no legal standing within the Community, and it is highly unlikely that they will supply any paperwork to confirm the VAT status, other than probably similar comments to mine above.

As I said above I cannot foresee any problems as you have enough evidence to show the aircraft’s history within the EU

(Excerpt from letter from HMRC when we were transferring our aeroplane to the N reg)....