At Martyn Fiddler Aviation we want to de-mystify the complex web of customs rules and provide you with the advice and solutions to ensure hassle free travel, whatever your purpose.

We have prepared a 6 week series of articles: The Customs Collection

Week by week we will explain what customs duties are, who needs to know, how they apply to aircraft and what solutions are available.

Definition: What are customs duties?

A ‘customs duty’ is any tax, tariff, fee, expense, processing charge or other impost imposed by a Governmental authority upon any item by reason of such item’s importation into a country. This is a complex area and often aircraft owners are often unaware of the network of customs rules applying to their aircraft as they cross borders.

Week #1: Let’s start by expaining the benefits of a solution known as a Customs Warehouse and how aircraft owners, brokers, manufacturers and lawyers can use it to benefit their aircraft transactions.

The Customs Warehouse

What is it and how does it work?

Customs Warehouse’s are currently available at large number of UK airports covering most of the major OEM suppliers and MRO providers; this offers a wide range of choice regardless of the aircraft type or aircraft registry involved. Martyn Fiddler Aviation is certified as an Authorised Economic Operator and we have negotiated a significantly large customs guarantee. This guarantee covers multiple high value aircraft across many locations.

Entering an aircraft into a Customs Warehouse allows for PPI’s and re-registration works to be carried out without undue time pressures and allowing for any potential delays without having to reposition aircraft. Further it provides VAT and duty mitigation, brings security to all parties by de-risking a transaction and allows for registry and inspection works to be carried out seamlessly benefiting all involved. This offers logistical advantages and cost savings by removing unnecessary flight sectors.

There is no registration or tax reporting required, transactional values and parties involved are confidential. Once an aircraft is placed into a customs warehouse it is considered to be under customs control. This is a recognised manner that can be evidenced should a seller or buyer need to demonstrate a transaction for tax relief or write down purposes.

The benefits

A Customs Warehouse is a location in which both tax and duty are considered to be suspended for the period a specific item is placed in it.

For aviation this means if an aircraft is placed in a Customs Warehouse as part of a sale, there is no tax or duty payable on the aircraft until it leaves the warehouse and arrives at its intended destination.

Using a Customs Warehouse in this way benefits all parties to a transaction by de-risking the sale and purchase, allowing for greater flexibility with any registration requirements, and providing the choice of MRO and facility the aircraft can utilise. Additionally, there are no time limitations for the aircraft remaining within the warehouse which reduces pressure on PPI reports, time zone scheduling and the inevitable unforeseen matters which delay transactions.

Once a transaction has closed and any registration matters have been concluded, the aircraft can be flown away by the new owner. It is at this point all the suspended potential taxes are formally discharged in line with regulatory and contractual requirements.

Customs Warehousing is becoming increasingly attractive to aircraft brokers as it acts as an aircraft showroom, offering a tax exempt location for presenting the aircraft to potential buyers with risk mitigation for both parties. Many aviation lawyers also recognise and understand the benefits and value a customs warehouse brings to a transaction and often make it a contractual obligation within the purchase agreement.

Following the departure of the UK from the EU in 2021, the ability to have a Customs Warehouse at a UK airport alleviates many of the logistical and administrative problems of the past. No longer are aircraft having to fly engineers to tax neutral territories with limited aviation resources and support.

Part of our end to end service

Martyn Fiddler Aviation provides customs warehouse access as part of its end to end services. We work closely with all parties to ensure a seamless transaction in a compliant and risk mitigated way. We handle all the custom paperwork and administration on behalf of clients ensuring the entire process is conducted correctly and in full compliance of the applicable regulations.

Contact Phill Rawlins at phill@www.martynfiddler.com to learn more about our Customs Warehouse and all services available in our customs collection at Martyn Fiddler Aviation.