§ Mr. Laws:To ask the Chancellor of the Exchequer for what reasons ships and aircraft above a certain size are zero-rated for value added tax purposes; and if he will make a statement. [130552]
§ John Healey:Under long-standing EU VAT agreements, sea-going vessels used for: navigation on the high seas; for the purpose of commercial, industrial or fishing activities; for rescue or assistance at sea; and commercial aircraft used chiefly on international routes are relieved of tax.
The UK has implemented this by relieving ships and aircraft, not used for recreation or pleasure, from VAT according to their weight. This simple rule provides clarity and certainty for businesses.