On 5th April, Tax News reported on announcement made by the Chancellor in his Spring Statement about developments involving VAT. He is said to have confirmed that the UK Government will release HM Treasury’s findings and recommendations following a review of VAT administration in the Isle of Man after the “Paradise Paper” allegations. The Isle of Man operates a regime equivalent to the UK and shares revenue but it was alleged, following the leak of Appleby’s confidential files, that the Isle of Man was facilitating VAT avoidance on aircraft leasing. The allegations were made by media associated with the International Consortium of Investigative Journalists, which broke the “Paradise Papers” story, and centre on the importation of business jets via the Isle of Man into the EU.
Meanwhile, the Guardian reported on 5th April –
ISLE OF MAN “TAX BREAKS” FOR PRIVATE JET OWNERS ROSE TO £100 MILLION LAST YEAR
The Guardian reported that what it described as tax breaks for owners of private jets registered for VAT in the Isle of Man increased to £100 million last year, despite warnings from the EU Commission that the practice is a breach of EU laws. The latest figure brings the amount of tax avoided on private jets to £940 million since 2011. It says that, in 2018, the owners of 19 luxury aircraft applied for the maximum 20% VAT refund when importing their luxury aircraft into Europe, and all applications were granted. It points out that the promised UK review of the arrangements in the Island has still not been published.
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