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Balance of payment improves due to VAT on executive jets

It was reported in the press on 11 Feb, 2011 that “U.K. Trade Gap Widens to Record on Aircraft Imports”.

The Guardian now reports that the imposition of VAT on private jets led to a £2 billion drop in spending on executive jets in the first three months of 2011, compared to the previous quarter, when there was a rush to beat the 20% VAT charge.

This means that one third of improvement in net exports is accounted for by this drop in purchasing planes from outside the UK. It adds weight to arguments that taxing aviation would greatly improve our balance of payments, as well as giving other fiscal and environmental benefits.