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HMRC internal manual

VAT Transport

HM Revenue & Customs
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Handling of ships and aircraft: Law

The law applying the zero-rate to services of handling ships and aircraft is in the VAT Act 1994, Schedule 8, Group 8, item 6(a) and Notes 5, 6 and 7:

  1. Any services provided for -

  2. the handling of ships or aircraft in a port, customs and excise airport or outside the United Kingdom;


(5) Item 6 does not include the letting on hire of goods.

(6) “Port” and “customs and excise airport” have the same meanings as in the Management Act.

Further legal notes also restrict the application to qualifying ships and aircraft in certain circumstances: see VTRANS140200.

Group 8 Item 6(a) is based on Principal VAT Directive (Directive 2006/112) Article 148(d) and (g).

148 Member States shall exempt the following transactions:

(d) the supply of services other than those referred to in point (c), to meet the direct needs of the vessels referred to in point (a) or of their cargoes;

(g) the supply of services, other that those referred to in point (f), to meet the direct needs of the aircraft referred to in point (e) or their cargoes.