UK: VAT and Customs Duties - Recent News in Relation to Aircraft

Last Updated: 6 July 2010
Article by Zoe Hammond and Aideen Ruddy

Clarification of customs duty relief for the importation of civil aircraft (JCCC CIP (10) 38 Importation of Civil Aircraft for Maintenance/Storage, 27 May 2010).

Customs duty is a tax charged on the importation of goods produced outside of the EU. There is relief from such customs duties on the importation of civil aircraft into the UK where the aircraft is being imported for maintenance or storage purposes.

Broadly, there are three heads of relief, and to apply for any of them, a "declaration" must be made.1

  • Firstly, if an aircraft which is not in free circulation is imported for a short time for repair, overhaul, refitting, renovation or refurbishment and is later re-exported, relief may be available under "inward processing".
  • Secondly, for aircraft which are not in free circulation and are registered outside the EU, and which are temporarily imported for private or commercial transport use, relief from customs duties may be available under "temporary admission".
  • Finally, if an aircraft is imported for maintenance/repair, and afterwards will remain within the EU, relief may be available under "end use".

In order to obtain authorisation for "end use" or "inward processing" relief, an application should be made to HMRC. HMRC then has 30 days to consider the application. Preferably, the application should be made in advance and be attached to the import entry but can, in exceptional circumstances, be done retrospectively. It should be noted that authorisation is only available to applicants who are established in the EU.

For the purpose of "end use" relief, the aircraft must carry a civil registration. This can be UK/EC or a third country. Normally, the aircraft should be imported under the end use authorisation of the owner/lessor of the aircraft in the EU. This is the position even if they are not carrying out the work themselves.

If, on the other hand, you are an agent, you may use your own end use authorisation number. It is important to note that, in these circumstances, you will be responsible for ensuring that the conditions of authorisation are adhered to and for any customs duty that may become due.

For aircraft maintenance/repair organisations that wish to import spare parts, it is necessary to obtain an end use authorisation in your own right. Alternatively, however, if the parts carry a certificate of airworthiness which is available at the time of import, the Certificate of Airworthiness Scheme may be a more suitable avenue of relief. (This is outside the scope of this article).

Different procedures for making an application for the relief apply in different situations, and HMRC has set out the most common situations in its recent published guidance. For example, for aircraft not carrying passengers. or freight which is imported from outside the EU, the reason for the visit will determine what relief the aircraft should be declared to. An end use declaration will be appropriate where the aircraft is to be permanently imported. Whereas, if the aircraft is imported for repair or maintenance and is to be re-exported, inward processing may be the more suitable relief.

For aircraft carrying passengers or freight, arriving in the EU from a third country, which then discharges the passengers or freight and then flies to the UK for maintenance, the aircraft can enter the EU to discharge the passengers/freight without any customs entry being required. On arrival in the UK, an entry to "end use" relief will need to be made (assuming that the aircraft remains in the EU). After the maintenance works, the aircraft will be deemed to be in free circulation and can fly within EU member states without another entry being required.

For advice on customs duties in relation to other specific arrangements involving the importation of civil aircraft arriving in the UK for non-passenger related uses or for general advice on HMRC's guidance in this area, please contact Ray Smith (Tax, Partner) or Zoe Hammond (Tax, Associate Director).

Change to supplies of "qualifying aircraft" that can be made at the zero rate

HMRC announced in the two recent Budgets - first on 24 March 2010 and then again on 22 June 2010 - that measures would be enacted (in a Finance Bill introduced by the current Parliament) to change the definition of aircraft that can be supplied at the zero rate of VAT to one based on the status of the customer using the aircraft, rather than on the aircraft's weight and usage2. This will bring UK law in alignment with EU law3. Supplies of aircraft after 1 January 2011 will then only be zero-rated where used by airlines operating on mainly international routes. The change is likely to have an adverse impact on general aviation users, in particular private users, as having to charge VAT at the standard rate will present a cashflow issue, and potentially increase their ongoing cost base. The change will now also have even greater consequences for such users following the announcement in the 22 June Budget that this standard rate will be increased from 17.5 per cent to 20 per cent from 4 January 2011.


1. Article 36(a)(1) of the Community Customs Code (Council Regulation 2912/93).

2. Currently, the supply of aircraft may be zero-rated where the aircraft is of a weight of no less than 8,000kg and is not designed or adapted for recreation or pleasure use (Schedule 8 to the VAT Act 1994).

3. Article 148 of the Principal VAT Directive.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions