VATPOSS11400 - Hire of means of transport: Hire with crew and liability
Liability
The hire of a means of transport that is a ship or aircraft is also commonly referred to as a 鈥榗harter鈥�. When the place of supply is the UK, the hire of certain 鈥榪ualifying鈥� ships and aircraft may be zero rated under the VAT Act 1994, Schedule 8, Group 8, items 1 and 2. Guidance on liability can be found in and in (Ships, aircraft, and associated services).
Hire with Crew
Where the supply is of a ship or aircraft with a crew under a charter contract the supply is first and foremost the supply of the hire of a means of transport; however, we will permit the supply to be treated as transportation if the parties to the charter wish it to be.
Where transport is hired along with a driver, pilot, crew or operator other than under a charter contract this is normally regarded as a supply of passenger transport or freight transport services.
Guidance on transportation is covered by different place of supply rules (see the guidance on ).
Many passenger transport services are zero-rated under the VAT Act 1994 Schedule 8, Group 8, item 4; guidance on liability can be found in VATPOSTR and in (Passenger transport).