Zero-rating applies to:

(1)the supply, repair or maintenance of ‘qualifying’ ships or aircraft over a certain weight and which are not designed or adapted for use for recreation or pleasure; and

(2)the modification or conversion of any ship or aircraft, provided that when modified or converted the ship or aircraft remains qualified.

(VATA 1994, Sch. 8, Grp. 8, items 1 and 2).

Supplies before item is seaworthy or airworthy

Zero-rating has been extended to a supply of parts and equipment in the course of constructing a qualifying ship (or aircraft) to supplies made before the ship (or aircraft) is seaworthy (or airworthy) (VAT Information Sheet 15/2007).

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