VAT stifles imports, says UK charter firm | Aviation International News

Charter & Fractional

VAT stifles imports, says UK charter firm

Imports of business aircraft into the UK have ground to a halt since tax authorities there scrapped its zero-VAT rating in January, according to Gama Aviat

By Charles Alcock • Managing Editor

May 17, 2011

Imports of business aircraft into the UK have ground to a halt since tax authorities there scrapped its zero-VAT rating in January, according to Gama Aviation CEO Marwan Khalek. The change was forced on the UK by the European Commission with the intent of harmonizing VAT rules for aircraft sales, but the outcome has been a confusing muddle in which no one seems sure how VAT should now be applied.

Khalek, who is also chairman of the British Business and General Aviation Association, has been pressing HMRC (Her Majesty’s Revenue and Customs) to clarify how the rules now apply and to ensure that the UK is, in fact, in alignment with the VAT regime in other European Union (EU) countries. “The VAT issue is a nightmare and the HMRC couldn’t have made a worse job of this if it had tried,” he told AIN.

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