Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions his Department has had with officials in the EU on the VAT status of aircraft imported into UK territories but remain in EU member states after the UK leaves the EU.

Treasury Ministers meet regularly with EU counterparts to discuss a wide range of issues.

The free movement of aircraft being used as a means of transport is guaranteed by the Chicago Convention. This allows aircraft to land and take off at airports all over the world without the inconvenience of paying and reclaiming customs duties each time a trip is made. This will continue after the UK exits the EU.

VAT is charged on the sale or import of aircraft at two rates – either 20 % or 0%. The rate applied is dependent on how the aircraft is used. Details of which rate is applicable is available on the government website GOV.UK.

If the UK leaves the EU without a deal imports from the EU will be charged VAT in line with the rules currently applicable to imports from outside the EU. However where the aircraft belong to a person or company established outside the UK they can stay in the UK for at least 6 months using temporary admission. Where the aircraft belongs to a person/company established in the UK the person may be eligible for returned goods relief which allows UK companies and persons to re-import their items into the UK without payment of VAT as long as they fulfil the conditions given in HMRC guidance.

References: Notice 301 Customs special procedures for the Union Customs Code Annex C Temporary Admission , end-use relief