AAA calls for tax-free fuel
The UK government is to review value added tax (VAT) rules, which could lead to air ambulance charities being exempted from paying VAT on the fuel used by their lifesaving helicopters. The announcement by Financial Secretary Mark Hoban followed a call issued by the UK Association of Air Ambulances (the AAA) for a balanced and fair approach to the application of VAT and fuel duty charged on aviation fuel where it is used by helicopter emergency medical services (HEMS).
The UK government is to review value added tax (VAT) rules, which could lead to air ambulance charities being exempted from paying VAT on the fuel used by their lifesaving helicopters. The announcement by Financial Secretary Mark Hoban followed a call issued by the UK Association of Air Ambulances (the AAA) for a balanced and fair approach to the application of VAT and fuel duty charged on aviation fuel where it is used by helicopter emergency medical services (HEMS). The rules will either be looked at under an existing review into the tax paid by healthcare charities, or the Treasury will launch its own review into the situation.
The AAA represents the majority of HEMS charities in England, which are funded mainly by local donations. Several of those charities are ‘penalised’ because they own and operate their own aircraft, having to pay value added tax (VAT) on the fuel they purchase, while other charities who lease their aircraft from a separate organisation are not charged VAT on fuel, said the AAA. The Association asserted that air ambulance charities that own and operate an air ambulance lose many thousands of pounds per year in VAT which could be spent keeping the aircraft flying.
National Director of the AAA, Clive Dickin commented: “There is precedent already set, with similar charities in a lifesaving capacity being VAT exempt for their fuel purchase. Some charities receive an exemption for purchasing a service from an air operator that results in the fuel used being VAT free. The AAA has reviewed all air ambulances and is presenting a brief report to the Treasury and asks that the Chancellor [of the Exchequer] amends the rules, ensuring all VAT and any duty paid on aviation fuel for HEMS is exempt.” He added: “These independently funded and operated aircraft provide an important role by saving lives and improving the outcome of serious trauma and medical illnesses. Every pound saved by the charities is vital and can be redirected to saving lives.”
Member of Parliament Hugh Bayley said that the HEMS charities are as vital as the Royal National Lifeboat Institute, which already benefits from exemptions from tax on marine diesel, adding that proving grants to helicopter charities to cover the cost of VAT on their fuel would cost the government around £150,000 per year.