Special Procedures

Understanding Special Customs Procedures

Any high value asset that crosses a customs frontier must be declared to customs for import to free circulation or entered into a special customs procedure, depending on the intention for entering the customs territory.

UK “G” (and Isle of Man “M”) registered and / or owned aircraft must be declared to Home Use in the UK (full import) and account for positive import tax (VAT) or, if eligible, 0% tax as a qualifying aircraft. UK registered aircraft cannot use temporary admission in the UK.

In the UK, the VAT rate is 20% on the value of the aircraft. Customs duty remains at 0% for civilian aircraft.

An aircraft entering the UK will be presented with four scenarios:

• the aircraft is already imported and has accounted for UK   tax,
• or the aircraft needs to be imported and is required to account for   tax,
• or the aircraft is eligible for a special customs procedure that allows the suspension of import tax, or transactional tax for a specified period of time.
• or the aircraft is eligible to use temporary admission (TA) in the UK.

TA enables a non-UK registered and / or owned aircraft to operate within the UK as a means of transport by its user.  In this case there are no VAT charges, however there are specific requirements that must be complied with.

For example, the aircraft should not be used to compete commercially with other aircraft that have paid VAT in the territory. The aircraft registration, the aircraft owner, and the aircraft user cannot be locally resident.

A resident user is a difficult term to define as it can be determined through a multitude of factors. Usually, a UK resident either lives in the UK, holds a UK passport, is a tax resident, or has business or family connections in the territory. A user is typically described as the person who actively utilises the aircraft and decides its destination.

The same applies to EU registered and / or owned aircraft win the EU.