Guidance

Appoint a representative if you’re an overseas plane operator (Notice 550)

You need to appoint an administrative or fiscal representative if you’re liable for air passenger duty but you are not based in the UK.

Overview

If your business is not based in the UK and you’re liable for air passenger duty you must appoint either:

  • a fiscal representative
  • an administrative representative and provide a security

A fiscal representative will be responsible for making sure you meet your obligations and will be liable for the duty.

An administrative representative is a type of fiscal representative appointed solely for administrative purposes (keeping records and accounts on your behalf), but will not normally be liable for the duty. HMRC will ask you to pay security by way of a cash deposit or bond when you appoint an administrative representative.

You will still need to register and sign the air passenger duty registration form if you appoint a fiscal or administrative representative.

Fiscal representatives

A fiscal representative is responsible for making sure that you correctly account for and pay duty. If you fail to meet these requirements, your fiscal representative will be jointly held responsible for your obligations and liabilities. You cannot appoint more than one fiscal representative to act on your behalf.

When to appoint a fiscal representative

You need to appoint a fiscal representative within 7 days of a flight taking place, you may be liable to a penalty if you do not.

If your fiscal representative stops acting for you, you must appoint a new one within 7 days.

Appoint a fiscal representative

Your fiscal representative must notify their appointment to the air passenger duty Central Assurance Team within 7 days of their appointment.

Your fiscal representative must supply:

  • their name and their trading name (if different)
  • the name and trading name of the operator they represent (if different)
  • the full address of their principal place of business in the UK (including postcode)
  • their phone and fax numbers
  • the date from which their appointment is effective

The fiscal representative should provide this information on their own letter headed paper to the air passenger duty Central Assurance Team.

If your representative fails to do this, they may be liable to a penalty.

When security payments are needed

HMRC can ask you to provide a security if:

  • there’s a risk that duty will be unpaid
  • you’ve appointed an administrative representative
  • you want to restrict your fiscal representatives responsibilities to those of an administrative representative

Providing security for administrative representatives

Directions made under section 34A (1)(b) and (3) of the Finance Act 1994.

The following 3 points have the force of law:

  1. If your estimated air passenger duty liability is £25,000 or more over a prescribed 12-month period, the amount of security required on the appointment of an administrative representative is to be based on an average of your air passenger duty liability over a period of 5 months.

    If you’re already registered, the prescribed 12-month period starts on the day you notify us of the appointment of your administrative representative. If you’re not already registered, the 12-month period starts on the day you give us notice of your liability to be registered, or if earlier, the day immediately following the date on which you first operated a chargeable aircraft carrying chargeable passengers.

    If, due to the seasonal nature of your business, your estimated liability for the 5-month period does not reflect your air passenger duty liability in your busiest period of operation, we may select a period of 12 months which is not a calendar year on which to base the calculation. Alternatively, we may request that you lodge a guarantee for an amount based on a 5-month period during which your air passenger duty liability is at its highest.

  2. If you’re on annual accounting and your estimated air passenger duty liability is £25,000 or more over a prescribed 12-month period, the amount of security required on the appointment of an administrative representative is to be based on an average of your air passenger duty liability covering 16 months.

    If you’re already registered, the prescribed 12-month period starts on the day you notify us of the appointment of your administrative representative.

    If you’re not already registered, the 12-month period starts on the day you give us notice of your liability to be registered, or if earlier, the day immediately following the date on which you first operated a chargeable aircraft carrying chargeable passengers.

  3. You must review your estimated air passenger duty liability on each anniversary of the start of the prescribed 12-month period (‘the review day’). If, on such a review, your estimated air passenger duty liability for the 12-month period starting on the review day is £25,000 or more, you must within 7 days of that day, provide security in accordance with points (1) or (2) (as the case may be).

Pay your security

The security should be in the form of a written guarantee from a bank (or financial institution). We’ll review the amount of security you’ll need to pay on a regular basis.

If you do not pay a security, you or your fiscal representative will stay liable for duty payments.

Your security will be returned if you:

  • set up a presence in the UK
  • appoint a fiscal representative who is jointly liable
  • cease to operate flights from the UK

Providing security where there’s a risk of duty being unpaid

You may have to provide a security if HMRC thinks there’s a risk that the duty will be unpaid. You’ll also need to provide this security even if you’ve provided a security for an administrative representative.

We’ll calculate the amount security you need to pay using passenger and previously tax return information.

You need to pay the security as soon as you receive a notice of requirement in the form of a written guarantee from a bank (or other financial institution).

If you do not pay a security, you or your fiscal representative will stay liable for duty payments.

Your security will be returned when we decide there is no longer a risk of the duty not being paid.

You can request a formal departmental review of the form or amount of the security.

Failure to pay a security

If you cancel the agreement or reduce the amount of security without HMRC’s agreement, your administrative representative will become liable for the duty. We’ll notify your administrative representative that they’ll become liable for the duty 7 days after we were told about the change or cancellation.

Published 29 January 2018