Update on Aircraft VAT and UK Budget

Further to our news article of 01 June 2010, the UK Emergency Budget took place on 22 June 2010. We are pleased to say that the British Government has taken on board the Trade’s concerns and has put back the implementation date to 01 January 2011.

It is still the Government’s intention to charge VAT on imported aircraft, however we believe the new rules have included some additional flexibility. These new rules and alterations to HM Revenue’s internal guidance for Officers will be made available in draft form for comment by the Trade in due course.

Also in the emergency budget the UK has decided to increase the standard rate of VAT from 17.5% to 20%. This is effective from 04 January 2011 (which is the first working day of the year in the UK).

Martyn Fiddler and Martyn Fiddler Associates Limited will play their part in ensuring that any changes that do come about will be as benign as possible for our clients. Further, we are planning alternative solutions for those clients that may be negatively affected by any new regulations that do come about so as to mitigate the effect of those changes as far as possible.

Meanwhile, we can assure our clients and prospective clients that for the time being the regime has not changed and that it is "business as usual" until further notice.

Under European Community rules, the UK is very unlikely to apply any change to the regime retrospectively as goods/aircraft that have been correctly imported to a scheme that lawfully exists at the date of importation cannot have their status changed or reversed. In order to ensure this, it is essential that the aircraft has been/will be correctly imported prior to the date when any changes become effective.

We shall keep our clients and other friends updated on this important matter.  Please feel free to call us should you wish to.

Previous Related Articles

Tue, Jun 1st, 2010 - Update on VAT changes in the UK for aircraft

Mon, Mar 29th, 2010 - Aircraft VAT and UK Budget