FRS %'S

lor · July 2015

Hi all,

What frs % would be used for the following: 25620 Machining, please?

Please note the following:

When looking at the vat cert, please note registration was not done by myself, it's states machining.

Client works for airbus as a certified and airworthy engineer.

Thank you kindly

lor · July 2015

Thank you mrme89.

lor · July 2015

But unsure whether he should be under that % and sic code?

MarieNoelle · July 2015

How about this?

"Manufacturing fabricated metal products 10.5%

Builder’s and carpenter’s metal products
Containers and tanks, reservoirs, boilers and radiators
Cutlery, tools, locks and hinges
Forging, stamping, pressing or roll forming of metal items
General mechanical engineering
Steam generators
Steel drums and other light metal packaging
Wire products, nails, screws, other fasteners, chains and springs"

Gem7321 · July 2015

Can you please expand, does he only repair the parts/components or does he also test and fit them? If he doesn't fit them I don't think vehicle repair will work because he's not repairing the vehicle he is repairing the parts and components. I would be tempted to say 'any other activity' at 12%.

lor · July 2015

He works with aircraft as an engineer. Does that help?

lor · July 2015

Job description is: airworthy engineer dealing, with materials and processes, relating to the manufacturing of metallic aircraft parts for the wing.

lor · July 2015

Thank you all for your responses.

Gem7321 · July 2015

@lor I'd also recommend having a read of VAT Notice 744c in particular para 6.4 https://www.gov.uk/government/publications/vat-notice-744c-ships-aircraft-and-associated-services/vat-notice-744c-ships-aircraft-and-associated-services#repair-maintenance-modification-and-conversion-of-ships-aircraft-and-their-parts

If your engineer is working on mainly qualifying aircraft which may be zero-rated I wonder if he would be better-off on standard scheme?

lor · July 2015

I'll have a read now.

lor · July 2015

Ok,it sounds like vat can't be charged on his work as it is zero rated. This is quite a odd one as the previous accountant has set it up this way.

Gem7321 · July 2015

If the aircraft is a newbuild then it would be standard rated. If it is a modification or conversion (and I would say that manufacturing of metallic aircraft parts for the wing could be considered part of an overall repair/conversion) then 744c applies. I think if he was manufacturing the actual wing then we would need to be looking at manufacture, but he is manufacturing parts of the wing.

You'll need more info from the client to determine whether standard scheme would be best in relation to 744c. If he deals with airlines, repair facilities and govt agencies then it may well be best and the onus is on the customer to notify your client if 744c applies. If he is dealing with Joe Bloggs in his sport aircraft then it's probably not going to be relevant and you'll need to look at the FRS again.

I don't think a VAT specialist is necessary but a call to the VAT helpline probably won't go amiss. Also, the aviation industry is fairly small and incestuous, does he have a close customer whom he could ask for further advice?

Also feel free to PM me - I work in the aviation industry but not in repairs.

lor · July 2015

I have asked for a copy of his contract. I also have been having discussions with an accountant I know. I first of all said machining as that is the scheme the previous accountant has put him under. But in actual fact he is an engineer dealing with processes and materials relating to the manufacturing of plane wings.

lor · July 2015

He works for airbus, but gets paid by an intermediary company. I await for more info from client for now and will keep you posted.

FRS %'S

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