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Business taxes when importing a boat

Gedimin

Member
Joined
12 Mar 2015
Messages
92
Location
London
It's a very early stage of an idea, there is more consultation and work ahead. But I thought people here could suggest a good starting point by answering this question:

What are tax implications when you, as a business, buy a boat from:
a) UK, VAT paid
b) EU, VAT paid
c) Croatia, VAT unpaid

If I ever go ahead, there will surely be an accountant involved etc, for now, I'm only at the ideation stage.
Please do not start a conversation around the feasibility of boating business in the current economic environment - I know it's a popular topic for criticism :)
 

Tranona

Well-known member
Joined
10 Nov 2007
Messages
33,264
If you are importing the boat from the EU into the UK, VAT is payable - it is irrelevant whether VAT was paid or not in the EU. If you can convince HMRC that it is a purely business asset then you will be able to reclaim the VAT. If you buy a VAT paid boat from a private citizen then you will not be able to reclaim any VAT as that transaction is not a "chargeable event". If you buy it from a VAT registered entity they will charge you VAT and you will reclaim it assuming again HMRC recognise it. If you buy a new boat again the seller will charge VAT and you reclaim.

The key thing with owning a boat as a business is convincing HMRC that it is indeed a business. If you use it personally then you will have to pay as a "benefit in kind" for your use.
 

Gedimin

Member
Joined
12 Mar 2015
Messages
92
Location
London
If you are importing the boat from the EU into the UK, VAT is payable - it is irrelevant whether VAT was paid or not in the EU. If you can convince HMRC that it is a purely business asset then you will be able to reclaim the VAT. If you buy a VAT paid boat from a private citizen then you will not be able to reclaim any VAT as that transaction is not a "chargeable event". If you buy it from a VAT registered entity they will charge you VAT and you will reclaim it assuming again HMRC recognise it. If you buy a new boat again the seller will charge VAT and you reclaim.

The key thing with owning a boat as a business is convincing HMRC that it is indeed a business. If you use it personally then you will have to pay as a "benefit in kind" for your use.
What if I, as a business, buy a used boat from a private seller outside of EU? I pay VAT when bringing it to the UK and can reclaim it if I prove to HMRC that it is purely for business use?
 

Tranona

Well-known member
Joined
10 Nov 2007
Messages
33,264
What if I, as a business, buy a used boat from a private seller outside of EU? I pay VAT when bringing it to the UK and can reclaim it if I prove to HMRC that it is purely for business use?
Exactly what I said in my reply - yes. However according to the latest rules you will have to get the boat certified when you import it will may add significant cost. You may well also find that the cost of a boat in the EU is no less than an equivalent VAT paid and certified boat already in the UK.

Do not get fixated on avoiding tax, particularly VAT even on a business venture. The key thing is the cost of getting the asset (boat) into use when and where you want to use it
 

Gedimin

Member
Joined
12 Mar 2015
Messages
92
Location
London
Exactly what I said in my reply - yes. However according to the latest rules you will have to get the boat certified when you import it will may add significant cost. You may well also find that the cost of a boat in the EU is no less than an equivalent VAT paid and certified boat already in the UK.

Do not get fixated on avoiding tax, particularly VAT even on a business venture. The key thing is the cost of getting the asset (boat) into use when and where you want to use it
Unfortunately buying from abroad might be a necessity. Boat demand in the UK means that prices are often higher or a suitable boat cannot be even found. While in some traditional charter regions there is little demand for charters because of travel restrictions and therefore companies or private owners are selling at a lower cost.
 

Tranona

Well-known member
Joined
10 Nov 2007
Messages
33,264
Unfortunately buying from abroad might be a necessity. Boat demand in the UK means that prices are often higher or a suitable boat cannot be even found. While in some traditional charter regions there is little demand for charters because of travel restrictions and therefore companies or private owners are selling at a lower cost.
I understand that, but if you are thinking of buying in the Med do not underestimate the cost of bringing the boat back (been there, done that). It may make sense if you buy direct from an operator VAT free - many boats in Croatia and Greece can be bought this way - and bring it straight back. You will need a carnet for road shipment, but that is difficult from Greece but easier from Slovenia. That is where Bavaria and Hanse for example ship boats intended for Adriatic and Greek customers so plenty of truckers looking for return loads. A Med charter boat will need quite a bit of work to make it suitable for use here and coded to MCA standards. Bringing it back by sea is hard work on both crews and the boat, particularly if running to a tight schedule.

Not a good time to buy late model cruising boats for use in the UK. The Netherlands is still a good place to look as boats tend to be better looked after, but there may be less choice of boats suitable for charter.
 
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