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
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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.