Asked by: Lord Kirkhope of Harrogate (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what, if any, will be the VAT implications for aircraft which have to date been imported into, but may not be physically in, the UK on the planned exit day from the EU.
Answered by Earl of Courtown - Opposition Deputy Chief Whip (Lords)
Some aircraft imported into the UK will be eligible for zero rate of VAT as shown in Notice 744C on ships, aircraft and associated services.
If an aircraft has previously been imported into the UK with the appropriate taxes paid, its location on the day of Brexit will not affect its status as domestic goods, including UK VAT paid status. On return to the UK the importer may be able to claim Returned Goods Relief (RGR). This will be subject to conditions given in the RGR Notice 236.
The free movement of aircraft being used as a means of transport is guaranteed by the Chicago Convention. This allows aircraft to land and take off at airports all over the world without the inconvenience of paying and reclaiming import duties, including VAT, each time a trip is made. This will continue after the UK leaves the EU.
Asked by: Lord Kirkhope of Harrogate (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment that have made of the ways in which retail vehicle sales are financed, in the light of the increasing levels of debt incurred by new rental and lease purchase schemes and current pressures on the retail motor industry.
Answered by Lord Bates
The Government works closely with the UK automotive industry to understand the issues and opportunities the sector faces. The Government will continue its longstanding programme of support for the sector’s competitiveness.
The Government has fundamentally reformed regulation of the consumer credit market, transferring regulatory responsibility from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA) on 1 April 2014. This more robust regulatory system is helping to deliver the Government’s vision for a well-functioning and sustainable consumer credit market which can meet consumers’ needs.
Car finance companies are required to meet the standards that the FCA expects of lenders, including making affordability checks and providing adequate pre-contractual explanations to consumers. FCA rules are binding, and the FCA has a wide enforcement toolkit to take action wherever these rules are breached.
The FCA is committed to tackling sources of consumer detriment, and is looking at the car finance market to ensure that it works well and to assess whether consumers are at risk of harm. The FCA is carrying out supervisory work with lenders, and is carefully scrutinising firms’ sales practices and processes, to decide what further interventions may be necessary. This work includes assessing how well firms are managing the risk that asset valuations could fall, and how they ensure that they adequately price risk. The FCA will publish an update on this work in Q1 2018.