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Applebys: Something or other about planes and VAT. CM says Panic!

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1 hour ago, Max Power said:

That was the reason given on the Panorama programme, the IoM will register it within a week but it can take a lot longer in the UK. 

If he has not declared the VAT status correctly, that is his problem and nothing to do with the IoM C&E, just as it would be in the UK with HMRC.

they probably take longer than a week to check things out properly over the water then??

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3 minutes ago, WTF said:

they probably take longer than a week to check things out properly over the water then??

Probably a bigger workload more like?

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32 minutes ago, WTF said:

they probably take longer than a week to check things out properly over the water then??

Yes HMRC are considerably slower where VAT is concerned than the IoM. However if this comes out in favour of the IoM I will at best be staggered. I think the best we can hope for is that we are told to stop doing anymore. In effect the same as when we got coloured on "self leasing" of yachts a fair few years ago. However if it is the second time we have been caught maybe it might not be dealt with so leniently.

The schemes put in places do correctly apply VAT rules but the question is whether those VAT rules should have applied. In simple terms to be able to register for VAT you need to be making a VATable supply. In effect that means you are making sales of goods or services by way of business. If I buy a yacht or an aircraft using a company and then lease it when I use it to myself am I really making a supply by way of business, especially if I the one who ever leases the yacht. That in essence was what was happening with many yachts with the benefit there would be no VAT on the purchase. That was put a stop to in respect of VAT except if you genuinely are having your yacht chartered. e.g. you place with a professional charterer and when you want to use you charter of them. At other times third parties hire.   

With regard to the aircraft in very simple terms company A would buy the aircraft and then rather than charter it to me they would charter it to Company B which I also own. If I own both companies is that really still just self chartering as with a yacht except an additional layer i.e. Company B, is added. Potentially it works but the aircraft has also to be publically chartered by third parties. If the arrangement is set up in such a way that makes it virtually impossible or with the intention that the paperwork says it can be chartered by third parties but the intention is that it will never happen then are you really meeting the requirements of the legislation.

I'm guessing as I have not seen the paperwork etc but I am sure the VAT treatment is correct provided all the niceties with regard to the companies and the aircraft are concerned e.g. the aircraft is commercially available to third parties etc. To get the work into the IoM I would hazard a guess the IoM did not look to carefully at that and basically said to advisors etc something along the lines "tell us it meets the requirements and we will accept your word" or with a nod and a wink they may have just said submit the papers and we will accept without raising questions. It is only when you look beneath the surface and see the companies etc are not doing exactly what they should be to eligible for the favourable VAT treatment that the problem comes to light.

In the meantime IoM can state they followed the rules and act all innocent as the VAT treatment is correct if the companies and aircraft were established in accordance with the requirements and how they were to know that was not the case.

I give you an analogy. I own an off license and can only sell alcohol to over 18s. I follow this law religiously as I am a good citizen. But there are a load of 16 year olds outside desperate to buy booze and send money at my shop. As I won't sell to them they give money to the one of them who is 18 or who has forged ID saying they are 18 who buys the stuff for them. I know exactly what is going and the ID looks very dodgy but when they police turn up following complaints from parents I act all innocent and say but officer I did not sell any alcohol to anybody did not produce an ID card saying they were 18. Officer you're saying it was not genuine and the alcohol that was purchased was bought for that persons friends. Gosh. I had no idea. 

I may be completely wrong but knowing how things work I am a fairly sure this will be a case of questions not being asked at the time as they expected they would not like the answers. If they did not ask the questions and therefore did not have the answers then when the time comes nobody is to be blamed as they can just say they had no idea X was going on. 

  

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13 hours ago, Max Power said:

That was the reason given on the Panorama programme, the IoM will register it within a week but it can take a lot longer in the UK. 

If he has not declared the VAT status correctly, that is his problem and nothing to do with the IoM C&E, just as it would be in the UK with HMRC.

same day registration available.....

if a iom shell company has been used its iomg's problem........ 

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It's my understanding that it relied on the goodwill and honesty of the individuals/companies concerned and that as long as HMRC here got the assurances it needed in writing then it fulfilled it's role in the process. It's not up to a government department to check up once the paperwork is received and filed. The onus is on individuals/companies to operate within the legal framework.

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On 10/14/2018 at 10:15 PM, Lost Login said:

 

I give you an analogy. I own an off license and can only sell alcohol to over 18s. I follow this law religiously as I am a good citizen. But there are a load of 16 year olds outside desperate to buy booze and send money at my shop. As I won't sell to them they give money to the one of them who is 18 or who has forged ID saying they are 18 who buys the stuff for them. I know exactly what is going and the ID looks very dodgy but when they police turn up following complaints from parents I act all innocent and say but officer I did not sell any alcohol to anybody did not produce an ID card saying they were 18. Officer you're saying it was not genuine and the alcohol that was purchased was bought for that persons friends. Gosh. I had no idea. 

  

Not quite, If you have supplied Alcohol to an under 18 year old then its a strict liability offence, so it wouldn't matter if the ID was not genuine you would, subject to the other available defences, have committed the offence.

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When deciding whether we are prohibited from releasing information under FOIA by our duty 
of confidentiality, CRCA section 23(1) sets the following two questions:  
 
  Would the requested information be held in connection with a function of 
HMRC?  
  Would the information relate to a "person" who could be identified from the 
information requested? 
 
The term "person" includes legal entities such as companies, trusts and charities, as well as 
living individuals (see Schedule 1 of the Interpretation Act 1978).  
 
In this case, the answers to both questions is "Yes". Our duty of confidentiality therefore 
applies under CRCA section 18(1) and we are exempt from releasing the information under 
FOIA section 44(1)(a).  
 
Sometimes even just confirming whether we hold the information co uld tell you something 
about this person. So FOIA section 44(2) exempts us from either confirming or denying 
whether we hold information as it would also breach the duty of confidentiality set out in 
section 18(1) of the CRCA. 

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I have to say I wasn't exactly expecting an answer.

But the slightly concerning aspect is that it seems to me that the catch-22 :

"Would the requested information be held in connection with a function of HMRC? "

essentially means they don't have to tell you anything.

Ever.

If Mr Quayle et al pick up on that they won't even need the much-derided and totally threadbare "commercially confidential" load of nonsense any more.....

Not that they care....

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Worever you fuckers might say and all that, money laundering is far better than shoving drugs up your gary glitter and that. and farv better than swallowing it. fookin' hell, in order to have a holiday in Spain and that I would far rather do some money laundering or tax dodgining or pretending I was a company director on the Isle of Man than do that shit.

They don't call it white collar crime for nothing. Even the guys in real white collars are a bit whaheyy...a bit whahaaa..

and all that

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Unfortunately the browser I'm using can't translate your post....

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http://www.iomtoday.co.im/article.cfm?id=43658&headline=Next steps on VAT review of jet imports&sectionIs=news&searchyear=2018

Quote

The UK Treasury is will set out its ’next steps in due course’ over its review of the island’s VAT procedures on corporate jet imports.

The island became the centre of international media attention almost a year ago following allegations made as part of the Paradise Papers exposé.

Claims focused on the VAT treatment of business jets imported into the EU through the Isle of Man with allegations that wealthy individuals were using our Customs procedures to pay zero VAT on luxury planes.

The report was due to be published in the spring but has still yet to be signed off by Westminster.

A Treasury spokesman told the Manx Independent: ’HM Treasury and HM Revenue and Customs officials are continuing to work with Isle of Man Customs and Excise on the review of their VAT procedures for the importation of aircraft and yachts.

’We will set out our next steps in due course.’

At a press conference last year, the Chief Minister announced that UK Treasury had been invited to assess the practice for aircraft importation, with focus on the VAT treatment of leasing arrangements.

Howard Quayle said a review by our own Customs and Excise team had found no evidence of wrong-doing or mistaken refunding of VAT.

Figures released by the Manx Treasury following a Freedom of Information request showed almost £800m in VAT has been refunded since 2011 on corporate jets imported into the EU via the island.

Up 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.

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

 

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Because of the long delay in the issuing of any meaningful statement, it sounds to me that the issue has highlighted a loophole in the VAT regulations which they need to close or revisit? The regulation must be extremely complex? Either way, it hopefully means that we have done no wrong? 

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1 hour ago, Max Power said:

Because of the long delay in the issuing of any meaningful statement, it sounds to me that the issue has highlighted a loophole in the VAT regulations which they need to close or revisit? The regulation must be extremely complex? Either way, it hopefully means that we have done no wrong? 

its only £800 million......

the prom and sp will cost more......

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1 hour ago, Max Power said:

Because of the long delay in the issuing of any meaningful statement, it sounds to me that the issue has highlighted a loophole in the VAT regulations which they need to close or revisit? 

That's my guess too.

1 hour ago, Max Power said:

The regulation must be extremely complex? Either way, it hopefully means that we have done no wrong? 

I don't think it is that complicated. From having read the relevant law, HMRC's guidance and a related ECJ judgement, it seems pretty clear the supply of aircraft in the circumstances reported is indeed meant to be zero-rated. The only 'wrongdoing' I could see the IoM being implicated in is if it has turned a blind eye to some sort of sham arrangement. However on the basis of what's been reported at least, there doesn't seem to be any credible suggestion of any sham. It's just that the arrangement for the supply of the aircraft has been made in such a way that it is zero-rated.

If there's a problem, it seems to be with the law and UK / EU guidance, not with the IoM's behaviour. But let's see what the long overdue HMRC review says.

Edited by Yibble
Link to related ECJ judgement added
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