FLY by Martyn Fiddler FAQ'S

28 May 2024

What is FLY by Martyn Fiddler

Fly by Martyn Fiddler is a new, innovative 3-in-1 business aviation product – tax advice, company formation and VAT business plan – created to fast track business aviation deals. FLY is tailored to the evolving needs of private jet owners who require UK importation as part of their ownership strategy.

Who is FLY for?

FLY by Martyn Fiddler has been created specifically for clients who require service excellence, fast turnaround and competitive pricing. It is tailored to the needs of buyers, brokers and lawyers who need a fixed price and a guaranteed turnaround time for their transactions. FLY is for business aircraft that require UK or EU importation as part of their ownership strategy and VAT mitigation. Please note, 60% of the aircraft use must be for business purposes.

How does FLY operate?

FLY by Martyn Fiddler combines our market leading services to ensure:

• clients understand their VAT position;
• a VAT registered corporate vehicle to own the aircraft is incorporated; and
• a business plan to support the VAT registration is prepared.

Martyn Fiddler will provide our services simultaneously to meet delivery timescales. A dedicated point of contact will ensure seamless communications throughout the service and clients will have on hand access to our industry tax, and customs experts.

What are the benefits of FLY?

• A combined 3 in 1 service: tax, company formation and VAT business plan.
• A dedicated single point of contact and on hand use of our industry experts.
• Fast tracked, easy to read tax advice.
• Timescales which meet your aircraft delivery schedule.
• Exceptional value at a fixed price.
• Risk reduced for all parties by having all services under one roof.

How can Martyn Fiddler provide FLY?

Martyn Fiddler hold licenses with the Isle of Man Financial Services Authority and Ireland’s Department of Justice and Equality to provide corporate and trust services. Furthermore, our tax team are qualified chartered tax advisors able to provide indemnified tax opinions. By combining our services and ensuring they operate concurrently we can deliver market expectations on quality and speed of service.

What tax advice will I receive with FLY?

FLY will provide clients with an indemnified tax opinion that examines the client’s situation and requirements in respect of the aircraft, its ownership and import.

What jurisdictions does FLY work in?

FLY by Martyn Fiddler provides a combined tax and ownership solution to international clients. to resolve VAT and customs matters in the jurisdictions in which they intend to operate, whether in the UK, the EU or both.

Does FLY with Martyn Fiddler mitigate VAT?

Yes. If the client’s circumstances are applicable, FLY with Martyn Fiddler will allow them to mitigate the VAT applicable on the value of the aircraft at delivery.

How do I engage with FLY by Martyn Fiddler?

An initial phone call with our tax and clients will identify whether FLY is suitable for the transaction. Following the call initial due diligence will be collected and one engagement letter will be sent. Completing customer due diligence is task one and as soon as this is complete the engagement can begin.

What customer due diligence is required?

Martyn Fiddler is required to hold customer due diligence before it can provide services to a client as we are a regulated and licensed business. These include identifying the ultimate beneficial owner of the aircraft, and any corporate structuring above the aircraft owning entity. The source of wealth and source of funds that will be used to purchase the aircraft and origin of the aircraft itself will also need to be ascertained. Our expert team will provide a full customer due diligence questionnaire following the first call and will be on hand to guide the client and their team through the process.

How does FLY operate once an engagement with Martyn Fiddler has started?

Once the letter of engagement has been signed and customer due diligence is complete, there are three steps.

1. Tax: Our tax advisors will start preparing the indemnified tax opinion to confirm the aircraft, its use and its ownership.
2. Company formation: Our client service team will fast track a company incorporation. The directors, registered office and administration will be provided by Martyn Fiddler as part of this service. Once formed the aircraft purchase documents can be assigned to the company and the directors can start reviewing any required transaction documents such as financing and security agreements.
3. Business plan: A key element of securing a VAT registration is the business plan which will support the application with the tax and customs offices. Our team of experts will gather the relevant information from you and the proposed aircraft operator to complete this while the tax advice is being prepared and company formed.

How should anyone interested in FLY by Martyn Fiddler get started?

There are 8 steps to follow for any buyer, lawyer or advisor:

1. Set up an initial call with Martyn Fiddler during which our team of tax and client specialists will gather facts and details of the proposed transaction. The team will confirm whether FLY by Martyn Fiddler is applicable to the purchaser.
2. Martyn Fiddler will provide details of the customer due diligence required to proceed and issue a letter of engagement. The customer due diligence will require details of the ultimate beneficial ownership and any relevant corporate structure so please have these ready.
3. Once the engagement letter is signed, 3 processes will start concurrently:
   1. Tax advice will be prepared and issued to the client.
   2. A company will be formed, and transaction documents will be reviewed and assigned as relevant.
   3. A business plan will be formed to support the application for VAT registration of the company.
4. The teams will work with the client’s advisors (including broker, legal team, family office and aircraft operator) to ensure all documentation is reviewed and approved before closing.
5. A bank account will be opened for the client, a local bank can be applied to or alternatively use of the client current bank is possible.
6. The VAT application will be made and subject to no additional question from the tax and customs authorities the VAT registration will be granted.
7. Martyn Fiddler assist with the importation of the aircraft at closing.
8. Martyn Fiddler liaises with parties following closing and providing the ongoing administration and management of the ownership company.

What other services can be offered by Martyn Fiddler?

Martyn Fiddler can also offer the following services to clients at an additional cost:

• EU and UK Import: following the purchase of the aircraft, the buyer will need to import the aircraft into the UK and or the EU. Martyn Fiddler can support both UK and EU import and facilitate temporary admission if required.
• Back-to-Back transactions: if there is more than one sale as part of the transaction, due diligence will be required on each intermediate party to the ultimate sale.
• Inward Processing: aircraft can be transferred into inward processing should any maintenance or upgrades be required as part of the transaction.
• Extended time: UK Customs Warehousing can be provided for transactions with an extended timescale if required.
• Additional Tax Advice: if either the buyer or seller wish to enhance their tax advice to include other sale matter or future use of the aircraft Martyn Fiddler will provide an additional quote for such work.
• US Import: if the aircraft will be departing for the US, Martyn Fiddler can assist you with import requirements.

Glossary of terms

Customs Warehouse: a Customs warehouse (CW) is a Customs special procedure which can cover goods stored in a warehouse location. Use of this procedure allows non imported goods, including aircraft, to arrive in a country without having to be imported and paying Customs duties including import VAT. Use of this procedure is only for non-free circulation aircraft and there is a restriction on what works (for example maintenance) can be completed to an aircraft under CW; it is primarily a regime for storing goods pending sale. The CW procedure is put in place under an authorisation granted to the warehouse holder. The UK, and some EU member states, permit aircraft to be sold inside a CW without charging VAT.

Free Circulation Status: aircraft that have either been formally imported into the customs territory or have been manufactured and sold inside that territory. Free circulation status is not permanent. For example, an aircraft loses its free circulation on every departure, however it can be recovered on aircraft’s return without further taxes becoming due.

Inward Processing (IP): a customs special procedure similar to the Customs Warehouse regime. IP is a relief specifically designed for non-imported goods, including aircraft, to be brought into a territory to have planned repair or maintenance works carried out. If the aircraft stays in the IP regime, or moves to another customs relief regime such as a Customs Warehouse, the aircraft does not need to be imported. The UK and some EU member states permit aircraft to be sold within IP without charging VAT.

Import VAT: a tax imposed on aircraft crossing the border into a customs territory. Import VAT is treated as a “duty of Customs” as it is managed by customs officers, whereas VAT incurred inside the territory, either the UK or the EU, is managed by local/domestic tax inspectors. This can lead to some confusion for aircraft owners regarding some of the principles of VAT reclaims between the customs and VAT teams.

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