VAT rules to change for UK
 

You might be interested to know (then again you might not), that the EU Commission has orederd the UK to change the law on VAT relating to aircraft.

Aircraft over 8000kg,s have, up to now been zero rated (with the odd exception) but the weight limit had no basis in European VAT law.

EU law says that aircraft can only be VAT free (exempt) if the are operated by airlines chiefly on international routes.

Is this the end of VAT free biz jets:confused:

Law must be changed within 2 months of June 25th 2009 (so from Aug 25th).

OUCH

Where did you get that info from? Nothing mentioned by any industry representative bodies like EBAA, BBGA, etc.

UK Must Modify Aircraft VAT Exemption

EC Takes UK to Task over Aircraft VAT Exemption: AIN Online

Very true and amazed it hasn't hit the headlines (or the industry) more widely.

Understand though that there is still an argument, if not a fight, to be had over this as there seems to be a glaring hole in the argument from Europe - but let's not raise it before the industry associations have their opportunity to stop it before this farce carries on.

We are such an easy target...

It is still possible to import Aircraft under 8000kgs VAT free into the EU from Denmark, but this will change on 1/1/2010 ?

If only it were that easy
 

You are right, most biz jets are owned by companies. However, many of the companies are owned by wealthy individuals who use the aircraft for private purposes. In such circumstances, there is a deemed supply of the aircraft. Hitherto, this deemed supply of a qualifying aircraft was zero-rated for VAT. If the law is changed so that the larger biz jets become non-qualifying, this deemed supply would become taxable at the standard rate. The wealthy owner might just baulk at having to account for VAT at 15% on his private or non-business use (17.5% from January 2010).

It is possible that HMRC in the UK may designate that the larger Biz jets are "of a type used by airlines for reward chiefly on international routes" (and if I were part of an industry group, that is what I would be lobbying for). However, the EU would need to be convinced by hard evidence that (say) a Citation X is used by an airline!!! (I suppose we then get down to what is the definition of an airline).

Miss T Wood

What are NETJETS but an airline?

TMAB

Airline does not mean a thing; either you are private OR you have an AOC.
This AOC allows you to do things like regular routes,or ad-hoc charter or both !!

The wording should be reviewed OR a list to be published on who is or who is not an "airline".

When tax laws are found to be incompatible with EU rules it is often the case that those who have been affected by the rule can be eligible to compensation - for damage suffered.

There is currently a group researching whether a claim can be made by aircraft manufacturers / dealers / brokers who have been affected by the arbitrary weight rule (ie selling aircraft under the weight limit).

Please PM me if you are a manufacturer, dealer or broker and would like further information.

John

HMRC Meeting
 

HMRC have called a consultation meeting for interested parties on 24 August (typical, this is one day before the deadline imposed by the EC).

I am attending, so will post when I know more. If anyone can't make it and want to ask a question, feel free to post it here and I will ask for you.

Miss T Wood

VAT CHanges
 

Meeting happened 24 August at HMRC in Whitehall. UK to accept EU's ruling that UK law must change.

Much debate was had as to what the definition of 'airline' should be.

HMRC to consult further and all interested parties invited to contribute.

Law will NOT be changed until consultation is complete

Miss T Wood