APD8400 - Special accounting schemes: Proposals

Proposals

Any aircraft operator wishing to use a special accounting scheme must:

• inform the CAT of their intention to do so; and
• send the CAT a proposal detailing their method.

Because special schemes are drawn up on an individual basis there is no standard format for a proposal and no application form. All proposals should, however, cover a number of specific issues – see Notice 551 Special Accounting Schemes for Air Passenger Duty for details of items to include in the proposal.

The CAT should ensure that all proposals are complete. If a proposal is not complete the CAT should discuss the problem with the operator and either ask them to amend the proposal, or include the missing details in the letter of approval.

A proposal is simply a request by an operator to use a special scheme, detailing the approach required. It is not legally binding.

Common problems

The following outlines the procedure to follow if problems occur with proposals. For further advice please contact the CAT.

What do I do if an aircraft operator’s proposal is incomplete or inadequate?

You should discuss the problem with the aircraft operator. You can then either ask them to submit a revised proposal, or the CAT can include any amendments in your letter of approval.

What if I discover during a visit that the aircraft operator is using other records to account for APD and is therefore in effect using a special scheme which has not been agreed without realising this?

If you are content that the “scheme” is producing the right amount of revenue due and it would have been agreed to it if the aircraft operator had submitted proposals at the time, you should contact the CAT who may retrospectively agree the scheme. You should however still ask for a proposal and the CAT may issue an agreement.

Can an aircraft operator amend a proposal once submitted to us?

Yes. A proposal is not legally binding until both HMRC and the aircraft operator have agreed it in writing. If a proposal consists of more than one document (for example the aircraft operator has sent subsequent letters of clarification) then this is acceptable, provided that the relevant documents are referred to in the approval letter.

What if a proposal arrives late?

In general, if a aircraft operator wishes to account for APD by starting to use a special scheme then a proposal must be received at least 3 weeks before the APD return is due. But this is subject to discretion. If the CAT decides that a scheme cannot reasonably be agreed in time then the aircraft operator must account on a transaction basis until the following month.

What happens if a aircraft operator suggests a “new” kind of scheme?

If a method fully meets with the legislation and is fair and accurate then the CAT should accept it. But if the method suggested has not been used before then the CAT should be contacted.