VAT refunds received on just two private jets

Monday 15th February 2021 2:15 am

Lewis Hamilton on the steps of his private jet

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A total of £10.9m of VAT was refunded last year on private jets imported into the EU via the Isle of Man.

But it’s a big drop on 2019 when VAT refunds on 19 imported jets totalled £49,913,734.

The issue of VAT refunds on corporate jets made headlines worldwide in 2017 when they became the focus of the Paradise Papers exposé.

Latest figures have been released following a Freedom of Information request to the Manx Treasury.

They show refund claims were submitted on just two private jets in 2020.

In both cases, 100% refunds were secured, totalling £10.9m.

In October 2019 the island was cleared of wrongdoing over its VAT treatment on imported jets.

An investigation by UK Treasury found no evidence of VAT avoidance but said further compliance checks are needed.

The review was carried out following a series of allegations of VAT avoidance in late 2017 that emerged following the release of the Paradise Papers.

These claims were reported in the Guardian newspaper and the BBC’s Panorama programme.

It was alleged that aircraft were being used for leisure by owners who then falsely claimed their plane was being used for business purposes in order to claim the VAT back.

When the Paradise Papers revelations were first published in 2017 much attention centred on Formula One champion Lewis Hamilton, who was accused of not paying VAT on his £16.5m jet.

He touched down at Ronaldsway in his new jet early on January 21, 2013, and stayed just long enough to finalise the paperwork with customs and claim a £3.3m VAT refund. He has since sold the aircraft.

Between 2011 and 2017, 100% refunds were given for 231 claims, totalling more than £790m.

The European Commission launched infringement procedures over the VAT treatment of corporate jets imported into the EU via the island.

It wrote to the UK Government, giving it two months to respond to the accusation it had not taken sufficient action over ’abusive’ practices.

The Manx government insisted we follow the same policy, rules and laws as the UK for VAT treatment of jet imports.

Until 2011, corporate jets over 8,000kg were zero-rated for VAT but then became VAT-able - but you could claim it all back if you used the aircraft for your business.

HM Treasury concluded UK and EU VAT law had been correctly implemented here.


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