Fuels: Aviation

Treasury written question – answered on 14th May 2008.

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Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

To ask the Chancellor of the Exchequer if he will estimate the revenue which would accrue in 2008-09 if value added tax were levied on aviation fuel at 17.5 per cent.

Photo of Jane Kennedy Jane Kennedy Financial Secretary, HM Treasury

VAT is already charged on aviation fuel supplied for flights within the UK at either the standard rate of 17.5 per cent or reduced rate of 5 per cent. depending on the type and quantity of fuel being supplied. However, under the normal rules of VAT, the tax charged can be reclaimed by a VAT registered airline or other business to the extent that it relates to their taxable business activities.

Aviation fuel supplied for use on intra-community or international flights is VAT zero-rated. However, even if our international agreements allowed the UK to impose VAT it could also be reclaimed subject to the normal rules.

HM Revenue and Customs does not hold sufficient information with which to make an estimate of the revenue that would otherwise accrue.

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