BBGA have been very concerned at the apparent lack of clarity surrounding the VAT treatment of aircraft in the event a deal is not agreed and the UK leaves the EU without a Withdrawal Agreement.
It was our understanding that all aircraft which were previously imported through the UK or Isle of Man would be deemed exported from both the UK and the EU on Exit Day. There was a risk that such aircraft would be exposed to UK VAT on entering the UK or that such aircraft would have to be reimported into the UK. Our Board Members have therefore been working with the DfT, HMRC, Treasury and the CAA to give comfort to owners and operators of aircraft which have already been imported into the UK or Isle of Man, that they will not have their UK VAT paid status affected, irrespective of where the aircraft is located on Exit Day.
We are pleased to confirm assurances have been given to us in writing that “HM Revenue and Customs (HMRC) will take steps to minimise burdens on aircraft, on which UK VAT has been paid, re-entering the UK from the EU. In particular, transitional changes will be made to Returned Goods Relief (RGR) to allow for returns of goods from the EU to the UK. This will mean that if an aircraft has previously been imported into the UK/IOM and the appropriate taxes and duties have been paid, its UK VAT paid status will not be affected on the day of EU Exit, irrespective of where it is located”.
Please note BBGA is not qualified to give tax advice and this note is for information purposes only. Please ensure you take appropriate advice on the tax treatment of aircraft you own or operate.