Aircraft and ships ― modification, repair and conversion, etc

Produced by Tolley

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Aircraft and ships ― modification, repair and conversion, etc
  • Maintenance, modification and conversion
  • VAT treatment
  • Repair and maintenance of parts and equipment
  • Aircraft
  • Ships
  • Subcontractor
  • Parts and equipment used in qualifying aircraft and ships
  • Supplies to government departments and the Scottish Administration
  • Zero-rated parts and equipment
  • More...

Aircraft and ships ― modification, repair and conversion, etc

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

This guidance note provides an overview of the zero-rating provisions that apply to the conversion, maintenance, modification and repair of aircraft, ships and their parts. This note should be read in conjunction with the Aircraft and ships ― supplies of aircraft and ships guidance note.

Maintenance, modification and conversion

Maintenance includes the following types of services:

  1. cleaning

  2. fumigation

  3. ships laundry that is not of a personal nature for the crew or passengers

  4. tests of components and parts

Modification and conversion includes the following types of services:

  1. lengthening the vessel

  2. rebuilding work

  3. structural alterations to the vessel

VAT treatment

The following provides an overview of the VAT treatment of the main types of modification, maintenance and conversion works that could be undertaken in connection with a vessel.

Zero-rated workStandard rated work
repair and maintenance of a qualifying ship providing all of the relevant conditions are metrepair and maintenance of a non-qualifying ship or a qualifying ship where the relevant zero-rating conditions laid down in the Aircraft and ships ― supplies of aircraft and ships guidance note have not been satisfied
modification or conversion of a qualifying ship providing that the ship remains a qualifying ship after the work has been completedconversion or modification of a qualifying ship that ceases to be qualifying once the work has been completed
modification or conversion of a qualifying aircraft providing that the aircraft remains a qualifying aircraft after the work has been completedconversion of modification of a

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