VAT: Change to zero-rating of 'qualifying' aircraft
The measure
The measure will change the definition of aircraft which can be supplied at the
zero rate of VAT from one based on weight and usage to one based on the status
of the customer.
Zero-rating will only apply to supplies of aircraft used by commercial airlines
chiefly on international routes.
Who will be affected?
- Suppliers of aircraft
- Suppliers of parts and services for aircraft
- Aircraft operators
When?
The change will apply to all such supplies made on or after 1 September 2010.
Our view
This measure was expected, as it aligns the UK definition of 'qualifying' aircraft with the EU VAT Directive following the commencement of infraction proceedings by the European Commission against the UK in autumn 2008.
