Aircraft and ships ― supplies of aircraft and ships

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 ― supplies of aircraft and ships
  • Qualifying aircraft and ships
  • Aircraft
  • Ships
  • Qualifying ships
  • Supplying aircraft and ships
  • VAT treatment
  • Chartering or hiring a means of transport
  • Adapted for disabled persons
  • Subcontractors

Aircraft and ships ― supplies of aircraft and ships

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 certain qualifying aircraft and ships. This note should be read in conjunction with the Aircraft and ships ― modification, repair and conversion, etc guidance note.

Qualifying aircraft and ships


The following will be viewed as aircraft for the purposes of these provisions:

  1. aeroplanes (civil and military)

  2. airships

  3. helicopters


  1. satellites

  2. spacecraft

VATA 1994, Sch 8, Group 8, Items 1, 2; 2006/112/EC, Article 148; VAT Notice 744C; VTRANS110100; De Voil Indirect Tax Service V4.251

A qualifying aircraft is legally defined as an aircraft that is:

  1. used by an airline operating for reward chiefly on international routes (see below)

  2. used by a state institution (see Council Directive 2006/112/EC, Annex X, Part B), is of a weight of not less than 8,000 kg and is neither designed nor adapted for use for recreation or pleasure. The weight is its authorised maximum take-off weight. This is specified:

    1. civil aircraft ― in the certificate of airworthiness in force for the aircraft

    2. military aircraft ― in the released documents issued by the Ministry of Defence

A state institution includes the following (this list is not exhaustive and other similar bodies would also qualify):

  1. central government departments and agencies

  2. devolved administrations

  3. The Crown

  4. the Royal Mail

It should be noted that it is the airline and not that particular aircraft that needs to fly on predominately international routes.

HMRC have stated that in their view an ‘airline’ is:

“An airline is defined in the

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