A report has been published by Her Majesty’s Treasury in relation to the Isle of Man VAT review.
The report outlines that there is no evidence of aircraft VAT avoidance in the Isle of Man and that the Isle of Man Government has correctly implemented and administered UK and EU VAT law for aircraft and yachts.
The Isle of Man Government invited HM Treasury to carry out a review of its VAT rules, following allegations of VAT avoidance in 2017. Financial Secretary to the Treasury, Jesse Norman, said:
‘I am pleased to confirm that the reviewers have found no evidence of widespread VAT avoidance.’
In a statement to the Isle of Man’s Parliament, Tynwald, the Isle of Man’s Chief Minister, Howard Quayle, said:
‘Media reports at the time suggested that the number of aircraft registered in the Isle of Man Aircraft Registry indicated how many aircraft-owning entities were registered for VAT. There is, in fact, no link between the two.
‘They also went on to allege that aircraft were being used for leisure purposes by owners who then falsely claimed that the plane was being used for business purposes in order to claim the VAT back.
‘We have always maintained that the Isle of Man Government has followed the same UK and EU laws in relation to the importation of yachts and aircraft.’
Isle of Man Managing Partner, Faye Moffett, said:
‘We welcome the HM Treasury report’s findings, that UK and EU VAT law have been correctly implemented in the Isle of Man and allegations of widespread VAT avoidance on aircraft and yachts have not been upheld.’
The report can be read in full here.