Mark Byrne is a director and shareholder of Martyn Fiddler Aviation. Mark studied law at the University of Westminster and received his MBA from Manchester ...Contact Mark Byrne
End of Year Thoughts & Post Brexit Planning
When I was planning to write this article last week I had assumed that it would be having had the benefit of knowing which way the British Parliament voted on the Separation agreement agreed between the EU and the British Government. That was still my thinking on Tuesday morning. However, I am writing this at 12:15 on Thursday 13 December, the vote has been cancelled and Teresa May, the British PM, has been subject to a no confidence vote by her own MPs. She won the vote, and true to form, is carrying on as though nothing has happened.
All this means we are none the wiser as to whether Brexit will actually happen, and if it does, when and on what terms. So what can an aircraft owner or prospective purchaser conclude when it comes to accounting for VAT and Duty in the EU, and how do we at Martyn Fiddler Aviation continue to be of service to our clients?
Firstly, so far as aircraft that have already been imported into the EU via the UK or Isle of Man are concerned, it is reasonably clear from the withdrawal agreement that those customs transactions (importations) that have occurred prior to Brexit, either 29 March '19 or the end of any transition period following that date, will remain valid. Therefore the VAT status of those aircraft will remain unaffected. After Brexit day or the end of any transition period, and given that the UK is no longer part of the Customs area and VAT system, aircraft owners requiring an EU importation will need to find a country other than the UK or Isle of Man in which to account for VAT and Duty. If that same owner requires an importation into the UK then a second importation process into the UK or Isle of Man will also be required.
Martyn Fiddler Aviation will continue to have the necessary expertise and customs facilities and knowledge to arrange for an importation into the EU and the UK/Isle of Man. Thus aircraft owners will still be able to get satisfaction of their importation needs from tax advice through to importation and any subsequent export through Martyn Fiddler Aviation.
A minority of our clients also require a holding company for their aircraft. Historically we have often supplied Isle of Man companies for this purpose. Post Brexit this method of holding an aircraft may still be appropriate. Qualifying companies holding aircraft will continue to be able to register for VAT in the Isle of Man, and despite hearsay, that continues to be the case today. Aircraft held in such companies after Brexit will still be able to import their aircraft into the EU using Martyn Fiddler Aviation's services. Consequently, for all practical purposes, Brexit will not restrict an aircraft owner's ability to account for VAT and duty and gain free circulation (freedom to fly anywhere within the EU without incurring further tax liabilities) both in the EU and the UK.
For those clients that require a holding company, but would prefer not to use an Isle of Man company, Martyn Fiddler Aviation's will be able to facilitate the formation and management of aircraft holding companies in a number of different EU countries while continuing to optimise tax effectiveness. Our ability to do this is a consequence of our focus on the aviation market and our determination to have the widest possible knowledge and tools useful for aircraft owners and operators and all of their different operational needs and preferences.
Isle of Man aircraft registrations (M register), which have nothing to do with accounting for tax (save for the avoidance of Insurance Premium Tax which can be a significant benefit in its own right) will continue to be available in a post Brexit world and will continue to offer all of the benefits that a non-AOC qualifying aircraft owner can enjoy today. The Isle of Man Aircraft Register closely cooperates with EASA, the UK's and German Civil Aviation Authorities amongst others. This will continue to be a priority for the Isle of Man Aircraft Registry post Brexit.
So in summary, despite the uncertainty, noise and bluster that the whole Brexit process has generated and continues to generate, Martyn Fiddler Aviation will continue to be ready, willing and able to service our clients' needs effectively and without interruption.
Before I get carried away and start to comment on the merits of the concept of Brexit and how it has been pursued I shall end here by thanking our clients for their business – we love serving you; our indispensable industry friends and fellow professionals who make our lives so much easier and my brilliant and hardworking colleagues who are a pleasure to work with. To them and to one and all I wish you a Merry Christmas and a very happy and prosperous New Year.
The information included in this article is considered true and correct at the date of publication; changes to rules and regulation made after the time of publication may impact on the accuracy of the information referenced or inferred to in this article. The information in the article may change without notice and Martyn Fiddler Aviation is in no way liable for the accuracy of any information printed or stored or in any way interpreted and used by the user. This article or the information contained in it is not provided or intended to be used as advice of any form.
If you have any doubts or would like to discuss any aspect of this article, please do not hesitate to contact one of our experts who will be happy to discuss your individual circumstance.