Specimen letters: Example letter of approval of special accounting scheme
Agreement for a Special Accounting Scheme for Air Passenger Duty (APD) under the Finance Act 1994 Chapter IV Section 39.
Thank you for your application for a Special Accounting Scheme dated 20 October 2006 and your supplementary letter dated 25 October 2006. We are pleased to agree your Special Accounting Scheme for Air Passenger Duty, under the following conditions.
A. Scheme Overview
The scheme will be valid from 1 November 2006 to 31 March 2007.
The scheme will be reviewed on 31 March 2007 and a further scheme may be agreed to account for the Duty from 1 April 2007.
The Air Passenger Duty (APD) due on all scheduled flights from the UK will be accounted for during the period of validity of the scheme based on the results of the sample taken in early October 2006, as laid out in Section B below.
The sample taken in October 2006 was agreed with HM Customs and Excise as being representative of the period of validity of the scheme and the accuracy of the sample was audited and agreed.
This existing Scheme is required to enable you to fully identify those passengers to whom the Air Passenger Duty (Connected Flights) Order 1994 applies. All other exemptions must be accounted for on a transaction basis and excluded from the special scheme.
Any charter flights will be accounted for individually on a transaction basis. If you require to include these in the scheme, this must be agreed with this office in writing.
B. APD Accounting
- Each flight from the UK must be analysed to identify:
(a) The total number of passengers on board each flight.
(b) all exemptions from the Duty, by category, for each flight, except those passengers to whom the APD (Connected Flights) Order 1994 applies.
All scheduled flights from the UK will be grouped as shown in the table at 10 below.
The number of passengers carried for each month in each flight group will be calculated from the information gathered at 7 above, and the total number of exemptions (excluding “connecting” passengers) for that group deducted, before the duty liability is calculated on the remaining passengers as detailed at 10 below.
In order to calculate the APD due on the passengers carried and to identify those passengers to whom the Air Passenger Duty (Connected Flights) Order 1994 applies, all scheduled flights from the UK will be grouped and the percentages of passengers at each rate of Duty (nil, £10, £20, £40, £80) will be taken from the following table.
|Flight Group||% of pax at £nil rate||% of pax at £10 rate||% of pax at £20 rate||% of pax £40||% of pax £80|
|Heathrow to EEA||7.47%||69.63%||22.90%||0.00%||0.00%|
|Heathrow to EAA||2.01%||90.46%||7.53%||0.00%||0.00%|
|Heathrow flights to Non-EC||10.28%||0.00%||0.00%||51.7%||38.02%|
|Manchester flights to non-EC||9.18%||0.00%||0.00%||60.83%||29.99%|
- Each month you will calculate and record the following details in your APD Account as required by the Aircraft Operators (Accounts and Records) Regulations 1994 and APD Information Paper 6 - Records and Accounts:
(a) The total number of passengers carried in the period from the information at 7(a)above.
(b) The total number of passenger exemptions from the information at 7(b) above and the total for each exemption category.
(c) The total Duty due and number of passengers carried at each rate of Duty.
(d) The number of passengers calculated as exempt from the Duty due to the provisions of the Air Passenger Duty (Connected Flights) Order 1994.
(e) The calculations for each flight group in order to reach the totals at 11(c) above.
C. Early Review
An early review of the scheme may only be carried out as a result of unforeseen circumstances or changes which may affect your APD liability; with the agreement of both XYZ Airlines Ltd. and HM Revenue and Customs.
The scheme is agreed for the existing flight routes and patterns, any changes must be notified to this office in writing.
You must notify this office in writing of any changes that have a significant effect on your business, or that may affect your APD liability.
Any changes notified as a result of 13 or 14 above may result in an early review of the scheme.
All records relating to the scheme operation must be retained in accordance with the requirements in the Aircraft Operators (Accounts and Records) Regulations 1994 and in APD Information Paper 6 - Records and Accounts.
Nothing in this agreement overrides any legal requirement.
The Commissioners reserve the right to assess the correct duty liability for a period covered by the scheme, if the scheme has not been operated in accordance with the above conditions, or if incorrect data have been used.
If the scheme has been operated correctly, no retrospective adjustments will be made.
This agreement is between HM Revenue and Customs and XYZ Airlines, APD Authorisation number 12345.
If you agree to the conditions laid out in this agreement for a special accounting scheme, please sign both copies and return one copy to this office.
Please contact this office if you have any queries, or are unsure of any requirement.
[signed as delegated by the appropriate Grade 7]
On behalf of XYZ Airlines Ltd., I agree to be bound by the conditions laid out in the Agreement for a Special Accounting Scheme, of which the above is a true copy.
Signed …………………………………………………….. Date……………………………
Name ……………………………………………………… (BLOCK LETTERSPLEASE)