BBGA has been working with the DfT, Treasury and HMRC with respect to the VAT treatment of aircraft in the UK post Brexit. Various members have expressed concern about the physical location of their aircraft on 31 December 2020 due to conflicting advice. We have explained the concerns and the risks associated with a lack of clarity on this important issue to Government.
HMRC have confirmed to us as follows (which is consistent with the previous message of comfort we received from the Chancellors office):
“Article 47(2) of the Withdrawal Agreement sets out that the presumption of the customs status of Union goods in Article 153(1) UCC will no longer apply to the ongoing movements of goods between the UK and the EU. As long as those goods remain in the respective customs territory – of the Union or of the UK respectively, no proof of the customs status of Union goods will be required. The non-application of the presumption steps in when the goods cross the border between the EU and the UK after the end of the transition period. The Government has agreed to provide transitional rules for claiming returned goods relief (RGR) where goods are located in the EU at the end of the transition period and return to the UK during 2021.
Aircraft can benefit from RGR into the UK in line with other goods. If they are located in the EU on 31 December 2020 and wish to utilise RGR they must be able to demonstrate that they have been in the UK previously. The normal three-year time limit will be automatically waived during 2021 and goods (including aircraft) will be eligible for relief regardless of when they were transported from the UK as long as they return to the UK by 31 December 2021 and meet the other conditions for relief.
The conditions for claiming RGR in the UK from 1 January 2021 are set out in the relief reference document published with the legislation on 16 December Link to Relief Reference Document.
The current process for claiming relief is set out in guidance here: Link to Claiming Relief Guidance
If you have any queries, please get in touch and we will point you in the right direction.