European business aircraft operators (‘NCC’ operators) will have to comply with the Air Operations regulation from August 2016. For some operators this could mean some big changes; so how should an operator go about implementing the new regulations?
When I set up my company I went through a similar process when I had to implement a much less challenging regulation: The Value Added Tax (VAT) Act.
How NCC is like VAT
It is important to my business that I get VAT right, but I’m not an expert on tax or accounting so when I started up the first thing I had to do was to learn about the applicable rules. I read a book, studied the HMRC website and signed up for some webinars. Once I had a basic understanding of VAT I was able to start setting up the business processes I needed. This meant adjusting prices for different customers, getting the right accounting software package and registering with HMRC. As I worked through submitting my first VAT return I wrote out the procedure so that I’d be able to do it the next time without having to go through the whole learning process again. Pretty soon I started to get customers from outside the EU. Although I had read the rules on B2B sales I wasn’t completely confident that I had interpreted them correctly so I took advice from a qualified accountant who explained what I needed to do. His advice wasn’t cheap, but getting VAT wrong could be very expensive.
The five steps
In order to comply with the Air Operations regulation NCC operators need to follow a similar process:
- Understand the rules. Start by reading the regulations and then get booked on a course where the rules will be explained to you in plain English.
- Set up the processes you need within your organisation. This will be more involved than my example of VAT, you’ll need to decide on accountabilities, responsibilities; how you will manage safety risk assessment and compliance monitoring functions as well as the operating procedures for operating your aircraft. You may want to implement a software solution to help with some aspects of the ‘management system’.
- Develop your documentation. The documentation records what you need to do to comply with the regulations and all of the key processes of your operation. It will be the day-to-day reference that your people use to get their jobs done.
- Submit a declaration to your ‘Competent Authority’
- Consider getting external assistance. The intent of the rules isn’t always immediately obvious and someone with a good understanding may help you to find solutions that will work for your business.
An ‘off the shelf’ solution?
There is no ‘off the shelf’ solution for either VAT or NCC. Buying an operations manual won’t make your operation compliant with the NCC regulations any more than getting a ‘VAT handbook’ would satisfy HMRC that my business is compliant with the rules for VAT. Compliance is about how we run the business and what we do every day. The documentation is just a way to make that easier.
Companies that violate the rules for VAT will face severe penalties. Operators who don’t comply with the rules for NCC operations probably won’t face such harsh penalties, but if you want to do it right then there will be a lot of work involved. There a few good consultancies that could help you implement the new rules, there are many more who will take your money in exchange for an operations manual that you’ll never use.