Operational Update: New VAT rules in effect for United Kingdom as of 1 January 2011

As of 1 January 2011, you may be impacted by changes in United Kingdom legislation regarding value added tax (VAT) exemptions for the provision of aircraft handling, maintenance and supplies, or the importation of new aircraft into that country.

Aircraft handling, maintenance and supplies

If you fly into or within the UK, you may be subject to 20 percent VAT charges on aircraft handling services.

Previously, VAT exemption for aircraft handling, maintenance and supplies was determined by an aircraft's maximum take-off weight (MTOW). Any aircraft with a MTOW of 8,000kg or more was exempt. Effective January 2011, VAT exemption eligibility is based on the status of the business operating the aircraft rather than the aircraft weight.

Per the UK Finance Bill 2010 and Article 148-E of the Principal VAT Directive, you must meet at least one of the following criteria in order to qualify for a zero-percent VAT exemption.

• 50 percent or more of your turnover, profit, number of flights, passenger/seat miles, or other applicable criteria result from operating for reward/payment transporting passengers or cargo chiefly on international routes.

– or –

• The aircraft is being utilized by a State institution, has an MTOW of 8,000kg or more, and has not been designed or adapted for pleasure or recreation usage.

How to certify VAT exemption under new rules Therefore, in order to continue providing eligible operators with aircraft handling, maintenance and supplies at zero-percent VAT, you must complete and submit the following forms along with appropriate supporting documentation to Universal Aviation (UK) Limited. Clicking "Download Forms" will download a single PDF file including the following: UK Aircraft Handling, Maintenance and Supplies Declaration Self-Certification of VAT Status * Send completed forms to: ukaccounts@univ-wea.com

Aircraft importation

Permanent importation of aircraft into the EU via the UK can also attract VAT at the increased rate of 20 percent. We recommend that any person considering permanently importing an aircraft into the EU via the UK or any other EU country seek professional advice to understand their tax implications.

Temporary importation will remain zero-rated for VAT purposes. A specialist importation broker can advise on the conditions for temporarily importing aircraft into the EU.

For any other questions or assistance, contact your Account Manager, Trip Support Team, or the Accounts Department at Universal Aviation (UK) Limited at
+44 1279 666 015, or e-mail ukaccounts@univ-wea.com