VAT threat could ground private jets
3 Aug 09
Now comes a story that will shake you to the core. It seems that the bureaucrats of Brussels are putting pressure on the UK Government to scrap the zero VAT rating currently enjoyed by private jets
At present, private aircraft are VAT-free but if the European Commission has its way, planes over 8000kg will be subject to VAT at the standard rate. Since even most multi-millionaires are not worth so many millions these days, this is going to hit them hard in the pocket.
Surely in these days of heightened concern over swine flu a private jet should be considered a necessity, not a luxury? After all, even in first class your fellow passengers could be harbouring all manner of germs.
On a serious note, Stuart Brodie, director at Grant Thornton Scotland says: “In an already difficult market, the addition of VAT to the cost of buying and flying private jets is likely to sound the death knell for a significant number of owners, operators and manufacturers.”
Brodie warns that owners and operators will only be able to reclaim VAT if the aircraft is used wholly for taxable business purposes. Where an aircraft is used partly for business and partly for private purposes, the VAT incurred will not be claimable in full.