Buying an ex vat paid boat in the uk.

[Tranona]

I'm not sure I agree with that. Given the cost of coding (properly) is significant and it is a bit of hassle to sort out a coded boat could well be worth more.

Which is why I said "may well be". You are right an ex charter boat could be of more value to somebody who wants to continue chartering where coding has a value - even more, probably if the boat comes with forward bookings.

Private buyers may however be wary, particularly if it has been a bareboat charter yacht where not only may the usage (hours) be high but it will have had several skippers leading to questions about how well it has been handled.

 

[Tranona]

I was always told that the VAT amount due was based upon the value that the Inland revenue assessed it at. And that certain items (possibly sails?) were not included in the valuation. Perhaps it might be an idea to contact hmrc to get their view on it?

Also, you could always 'remove' non essential items e.g. outboards, dinghies, etc. prior to it being assessed......

Just to put your mind at rest as John's tongue in cheek response was a bit curt (but of course correct).

Valuation only comes into the picture if you are importing a boat from outside the EU where the the value on import may be different from what you paid. For example if you had a boat built in South Africa, went on a 3 year round the world and then wanted to import the boat into the UK. Its value would be probably far less than you paid so you would negotiate its value using reference points such as value of similar boats, typical depreciation - even a surveyor's valuation. VAT would be on the value of the boat including all its bits and pieces as they are all subject to VAT. HMRC would not allow you to "remove" anything to lower tax.

When you are buying a boat in this country from a VAT registered trader, VAT is determined by the sales price and the seller accounts for it - just like John's Currys example.

 

[PaulGooch]

To register for VAT you would have to go over the threshhold to be considered for vat. Is it £22k earnings from a business? The asset ,boat is different. Unless you are sure ,they will nab you. Dont forget they can inspect the boat at any time they like.I would pay the vat ,that way the boat becomes more valuble and easy to sell on.

VAT registration is based on turnover, not earnings. It is currently £77,000

 

[henryf]

You can register for VAT with any turnover. You have to register once you hit the turnover threshold.


Henry

 

[jfm]

You can register for VAT with any turnover.

Yes but you don't have a right to be VAT registered. HMRC have discretion to refuse registration

 

[henryf]

Yes but you don't have a right to be VAT registered. HMRC have discretion to refuse registration

I wish I had the ability to refuse their request for me to join their little club

Henry

 

[PaulGooch]

I wish I had the ability to refuse their request for me to join their little club

Henry

Good innit, when you have to pay 20% of your profit, in addition to normal taxes. The motor trade must be the only place where you can sell something for a small profit and lose money due to the VAT.

 

[Jim@sea]

This probably wont work but. If the business which owns the boat is closing down they de-register from VAT. Then as a non Vat registered business they sell the boat and there is no Vat to pay because they cant charge it.

Or if Volvo Paul is VAT registered he just buys the boat through his business and claims the Vat back, OK when he comes to sell it he will have to charge VAT then.
I bought a brand new Princess 33 and claimed the VAT back.

 

[henryf]

If you buy the boat through your business for personal use then you get taxed as a benefit in kind at 20% of the boat's value. I think I'm correct in saying.

Henry

 

[jfm]

This probably wont work but.

No, it definitely wont work

 

[jfm]

If you buy the boat through your business for personal use then you get taxed as a benefit in kind at 20% of the boat's value. I think I'm correct in saying.
Henry

Only if your business is constituted as a company. Which it doesn't have to be. And it is the boat's cost, not value. And it is per day of availability. IE the BIK is 20%/365 per day the boat is availalbe for your use

 

[Hurricane]

Only if your business is constituted as a company. Which it doesn't have to be. And it is the boat's cost, not value. And it is per day of availability. IE the BIK is 20%/365 per day the boat is availalbe for your use

Wouldn't any BIK be grossed up (i.e. turned into a value that you would have had to earn to obtain that value)?
I.e. declared on your tax return.

 

[jfm]

Wouldn't any BIK be grossed up (i.e. turned into a value that you would have had to earn to obtain that value)?

No, hardly ever. That would only happen if the company agreed to pay the tax on behalf of the boat user, but that would be a dumb thing to do. Ordinarily the person getting the benefit would pay the tax

I.e. declared on your tax return.

Yes

But, I repeat, this BIK tax is only relevant if you form a company. And even then it's easy to avoid. The tricky part here where one needs a clever solution is the VAT