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VAT on aircraft repair for Guernsey customer?

My client is repairing an aircraft, in the UK, for a Guernsey registered customer.

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My client is a UK company which repairs and maintains small aircraft.  He has a customer in Guernsey who will fly the aircraft to the UK, my client will do the annual maintenance review on it and then the plane will be flown back to Guernsey.  I was under the impression that physical services provided to Channel Islands customers in the UK were subject to VAT but his customer has been advised by other people in the same situation that they do not pay VAT because 'it is an aircraft that is being exported'.  Clearly it is not actually being 'exported' but is there any provision for the fact that it is an aircraft?  I couldn't see any other than for commercial aircraft that operate on predominantly international routes, which I don't think light aircraft would come in to.

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By Accountant A
10th Feb 2020 11:29

There's a VAT Notice which may or may not be relevant.

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By paul.benny
10th Feb 2020 11:51

To save you the considerable effort of try to work out which Notice, I'll tell you.
It's VAT744C.

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Replying to paul.benny:
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By The Dullard
10th Feb 2020 12:06

I don't think this touches Notice 744C. I think you only get into 741A and see that it falls outside the scope of VAT, rather than being zero-rated.

As the OP describes it, there is a supply of services with a deemed place of supply in Guernsey (assuming the aircraft owner is a relevant business person).

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Replying to The Dullard:
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By paul.benny
10th Feb 2020 13:11

Notice 744c covers "Ships, aircraft and associated services" with section 6 relating to "Repair, maintenance, modification and conversion of ships, aircraft and their parts"

Acknowledging that I've only skimmed 744C, it would appear to speak to the matter here. What have I missed?

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Replying to paul.benny:
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By The Dullard
10th Feb 2020 13:13

That it seems to a B2C general rule service, in the first instance.

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Replying to The Dullard:
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By paul.benny
10th Feb 2020 13:44

We don't know from the OP that this is a private aircraft rather than one owned by a business.

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Replying to paul.benny:
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By The Dullard
10th Feb 2020 13:47

I meant B2B general rule anyway, but as the other Paul points out, being a light aircraft, it could be B2C.

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Replying to paul.benny:
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By paulwakefield1
10th Feb 2020 13:24

Won't be a qualifying aircraft

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Replying to paulwakefield1:
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By paul.benny
10th Feb 2020 13:47

You may be right. But we don't know one way or the other from the OP how the aircraft is used.

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Replying to paul.benny:
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By paulwakefield1
10th Feb 2020 14:12

It is true we do not know for certain. But a light aircraft will not meet the 8 tonne limit in the 2nd definition of a qualifying aircraft and, whilst not impossible, it is highly unlikely to meet the airline operating on international routes test even if the aircraft itself is not so used.

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By paulwakefield1
10th Feb 2020 13:00

Zero rating may also be available under 16.9 of Notice 741A although the interpretation of the second bullet point may be an issue and care needs to be taken with 16.12 which I gather HMRC are now interpreting quite strictly.

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Replying to paulwakefield1:
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By The Dullard
10th Feb 2020 13:05

Why are people trying to zero-rate something that, on the face of it, is outside the scope.

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Replying to The Dullard:
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By paulwakefield1
10th Feb 2020 13:22

Could be B2C
May be preferable to have the place of supply in UK if there is a choice
HMRC specifically raise the issue

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Replying to paulwakefield1:
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By The Dullard
10th Feb 2020 13:35

I have reread the OP and take your point.

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