Isle of Man asks UK to review VAT on aircraft after media allegations
The Isle of Man Government has asked the UK Treasury to review the importation of business jets into the European Union. It is asking it to focus on the Value Added Tax (VAT) treatment of aircraft being leased. The Isle of Man Treasury, Customs & Excise Division, is already reviewing VAT on aircraft.
The Isle of Man has announced the reviews in response to investigations made by journalists working with International Consortium of Investigative Journalists (ICIJ). The Guardian newspaper and the BBC’s Panorama programme are both working on stories looking at the Isle of Man.
“The VAT treatment of the importation of aircraft into the EU is a highly technical and complex area in which the Isle of Man follows the same policy, laws and rules as the United Kingdom. The Isle of Man Government works closely with HMRC and holds quarterly governance meetings on a range of VAT issues,” said Howard Quayle MHK, chief minister of the Isle of Man. “In light of the claims made by the ICIJ, we have asked HM Treasury to look at all elements involved in the process of the importation of business jets via the Isle of Man into the EU.”
The UK Treasury is expected to report its findings in 2018. The Isle of Man Treasury’s Custom & Excise Division has already audited 33 of 262 live aircraft VAT registrations and is now working on another 13. It says that since 2011 it has raised more than 30 assessments for under-declared or over-declared VAT worth £4.7 million.
“Like all responsible members of the global community, we take allegations of this nature extremely seriously. The ICIJ has so far rejected our repeated requests to provide written evidence to support their claims,” says Quayle. “During the course of our own ongoing review, we have found no evidence of wrongdoing or reason to believe that our Customs and Excise has been involved in the mistaken refunding of VAT.”
Treasury Minister Alfred Cannan MHK said: ‘The assessment by HM Treasury announced today further demonstrates that the Isle of Man is committed to protecting its reputation as a leading international business centre. The Isle of Man is not a place that welcomes those seeking to evade or abusively avoid taxes.”