Also we have an LLP which we run our JetRanger on which is part business (mostly) and part private, we took good advice on this and it has not been challenged, although they did challenge the vat registration but in the end they gave in…
Unfortunately, without posting a lot of detail on the exact nature of your operation (which I can fully understand you might not want to do, Phil) it is not possible to convey the full info which might help somebody to follow these fairly complex subjects.
VAT registration is the easy bit. The VAT inspector just needs to see a business plan, and you can claim back the VAT paid on the purchase of the plane. This results in a very welcome VAT repayment 
Of course it also means that the VAT registered company has to charge VAT to everybody flying the plane… for ever… which means that eventually you must lose out… unless you have some “exit plan”, probably involving a very depressed market value.
Re M-reg, I met up with the director of aviation at the IOM last week for about an hour so got the details of current policy from the horse’s mouth – for the IOM. The Guernsey reg originally said they will accept more or less anybody (non resident I mean, obviously) and later spectacularly backtracked on just about all of it. If they really do it, that would be potentially useful, with the right corporate structure, etc, etc. I take it you didn’t do it with a Cessna 150 while you are a resident of Mongolia
None of these options help to avoid the EASA FCL dual-papers requirement however, if you (the sole owner) live in the EU – if you go for the strictest interpretation of the “operator” residence. My views on that are well known (I don’t think any EU country is going to fall over itself testing it in its courts anytime soon).
JetBanger is leased, so VAT works for us, and we will send it back when we get fed up with it! Just as well really that its leased as its just had a £17k maintenance job done which we didn’t have to pay for, happy days. When we charter it out we charge vat, when the main company use it its cross charged, for private flying this is charged out also. This bit is easy.
Also to be honest when you get into turbine heli territory all the normal costs associated with a light aircraft look like pocket change!
For Guernsey, I had confirmation on Friday evening that they will take mine (and in fact all) Commanders, PROB40 due to ASG having a big hand in this. So I don’t see why they wouldn’t take a C150, but why would anybody do this?? My sole reason (apart from getting an FAA STC to install my Garmin Sat Weather), is to be able to use an FAA IR on what is currently a G reg aircraft.
I found them amazingly responsive and easy to deal with compared with than …say… The CAA
They will make good money for the island with this, might go and live there when we sell the company :)
Interestingly there is an ‘M’ reg light twin based at Sleap so they must accept some smaller private aircraft. But IOM is of no interest to me.
As i said, I go over on Thursday to pick up the aircraft with its shiny new toys and intend to touch base with them at that time and will report back.
VAT registration is the easy bit.
Peter, that is simply not true. VAT registration is incredibly hard for an aviation business these days. There is a significant amount of scepticism about whether any aviation business is real or a sham.
The problem with IOM or channel islands if you can get them to accept you is the cost – they charge far more than a US trust would. And let’s not forget residence of the operator does not mean the residence of the pilot,
I have all the costs, will reconfirm next week and let you know, it wasn’t too much I thought…
IOM I wouldn’t trust the two faced thieving IOM government with anything TBH
and you are right, it was a drama getting the vat reg but in the end we had all our ducks in a row so they were buggered :)
I’ve done the VAT stuff a number of times – been in business since 1978 and twice in aviation. The only time getting a VAT reg is a problem is when they think your business model is dodgy and you want to be doing big reclaims 
I wouldn’t trust the two faced thieving IOM government with anything TBH
Can you indicate why, Phil?
The only time getting a VAT reg is a problem is when they think your business model is dodgy and you want to be doing big reclaims
Sure but there is a presumption at HMRC that a business for aircraft or boats is just a way to reclaim VAT. There is a specific policy on the subject here. This makes it far more difficult to get VAT registered if you have a company operating an aircraft.
Yes; as I said you need a bona fide looking business plan.
If you start the operation and the sales go above the mandatory threshold, they will soon be after you for not having registered
There is absolutely no financial reason why one could not make a viable and fully legal business renting out one’s plane. In practice it is very difficult to achieve (as I know too damn well) because of the difficulty of finding enough customers of the required competence/attitude. The only long term successful scenarios I am aware of were built around a collection of several pieces of “wreckage” which the owner isn’t really interested in flying in himself.
But this is for another thread really – already started here.
As said above the HMRC in the UK are very tight on VAT scams and BIK, I have had two inspections that were directed towards these matters, the fact that I also have a private aircraft that is not within the company and the fact that they can see the aircraft are involved in a lease to another business that is independent of mine keeps them happy.
I would not want to mix business and personal use of an aircraft as it is likely to end in a whole lot of hurt from the tax man unless your records can show without any doubt your private income is supporting the correct slice of the aircraft costs.
