Chartering and bedsonboard for my Solent based motorboat

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Mikehp0

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Like many here, my wife isn't mad keen on boats. I feel guilty about the huge outlay to indulge my hobby.

So, I'm seriously considering trying to offset the costs next season.

THE BOAT
My boat is a Prestige 38s - smart, modern but not too posh. It has a great sociable cockpit, a decent turn of speed and is straightforward for commercial skippers to get used to quickly.

CODING FOR CHARTER
I'm in touch with a guy that runs a successful charter business. He has demonstrated that he has had to turn bookings away this season because he lacks a boat like mine on his little fleet. I've known this guy for a few years and I've found him to be very straight and decent.

He seems very realistic about success. He's working on getting me 10 charter days in year one and maybe 15 in subsequent years.

I'll get paid net of fuel, skipper, crew and cleaning. My fairly simplistic view re the costs is this. I'll keep the total charter cost very competitive. I'm not going to start a limited company or get VAT registered. I'll pay my 40% tax on the income and I'll offset very little cost against it to keep HMRC happy (still taking advice on this). If I don't do this, I'm still paying those berthing and servicing costs so not offsetting anything wouldn't actually matter much.

If I get 10 days, I'll offset the cost of "coding" (the biggest element of which is a bigger life raft and more life jackets) and half my 2017 berthing. In 2018, I ought to be able to offset the annual berthing charges plus annual servicing.

15 Days = 45 extra engine hours per year (my guy likes doing long Yarmouth lunches and afternoon swims at anchor).

A few have warned me that getting a boat "coded" damages value. 10%, the guys at Ancasta that I bought from, told me. Are they right? My boat isn't a gin-palace with lots of lovely wood and fittings to damage. It is a mass produced "caravan on the water" and worth just over £100k. Functional, well designed and reasonably well built. If I stick to the engine and leg service intervals and get anything that breaks fixed, will there be a big impact on value?



BEDSONBOARD
I'm keen to give this a try. I've already overcome the "strangers sleeping in my bed" issues because we rent out a holiday cottage in Padstow. The secret is to think about the money and never meet the guests.

Conscious of the hypocrisy in the following, but I can't see why anyone would pay B & B or small hotel prices to stay on my boat! However, beds on board are confident that they'll get me lots of bookings - they've got their own "changeover lady" and that takes away a lot of the stress. My marina and insurance company are both happy to let me do all this without any significant change to my costs.

So, what am I not seeing? Any advice gratefully received!
 
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What you're not seeing is the way a party of anglers will treat your boat....
Believe me, I've two friends that run official charter vessels and the boats take an absolute hammering!....oh and these are proper angling charter craft built to take it...
IMHO.....think again.
 
I cant see that coding a boat will make any difference to its value.

If as a result of coding it is knackered, high hours and so on then maybe yes, but coding itself simply gives other options in my view.

Beds on board. I rent my house on Air BNB when i am not there. I no longer rent to groups of any kind, just couples with kids. I dont want to go into why but the outcome was pretty horrific and cost air BNB £12,000.

So hint 1 is forget boys weekends.

Next a house is a house. This one is new. You would think nothing can go wrong. Wrong.

The though of non boat people dealing with toilets that dont take wet wipes, filling the fuel instead of the water ( and not telling you) poplin the shore power with 4 hair dryers etc. I can only imagine given what happens to my brand new house ( just "stuff" ) what on earth with happen with a boat, so personally i would give this a wider berth than chartering - where at least a skipper is in charge.
 
Until recently I chartered my boat on a sole trader basis, the same as you are planning. I kept a log of charter and personal use, which gives a "personal use percentage". (NB. It only counts as personal use if you go to sea in the boat, not if you stay on it in port.)

Costs were split into two groups;
1) charter specific costs like coding fees, crew costs, charter insurances etc.
2) General running costs like berthing, servicing, polishing, antifouling etc.

I deducted 100% of the charter specific costs, and applied the personal use percentage to the general running costs. You can also deduct capital allowances on the boat value and any ancilliaries you buy, again you have to apply the personal use percentage.

That's basically it. When all costs were added up I made a loss each year, mostly due to the effect of capital allowances, so I was able to offset the loss against other income for tax purposes, but when I stopped chartering the boat I paid tax on the nominal gain between written down value and true value.

I was guided to account for the charter income as above by my accountant, and was audited by HMRC who approved the accounting treatment
 
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thanks - some very good advice here.
I need to get the accountant earning his keep! It sounds very similar to the holiday cottage situation.
 
Many Thanks for this - I guess the message here is "be careful about the guests". I'm used to that with my holiday let - no big parties, a genuine motive for their stay, a big deposit, a local caretaker, a 24/7 emergency number and some really good instructions.
same goes for charters, I suppose - no anglers sounds a must - but they wouldn't like my boat.
 
I think if you're even considering this then you're better off selling it and chartering a boat yourself. How many days charter can you get from investing the equity you have in the boat?
 
>>How many days charter can you get from investing the equity you have in the boat?

ah - well - good point and that takes us into the realms of psychology. Owning a boat gives me pleasure. When I'm stuck at work, I'm thinking about it. I'll take any excuse to go see it - do office work on it, read a book on it etc. Chartering and bedsonboard will curtail this somewhat but that's no bad thing - I have a job I need to keep! However, there's more man maths at play here. My boat gives us 2 weeks of holidays per year. That's worth about £10-£15k per year. If I can offset the running costs and factor in the holidays, I've got free boating.
 
>>I would be astounded if you can cover the cost of coding with just 15 days charter work.

Here's what I've been quoted:

Inspection and certification cost. £735
2 life rings. £84
Signage. £40
NUC lights. £85
Kedge anchor. £72
Life raft hire (10 man). £300/year
10 auto life jackets. £820
First aid kit. £65
Safety wire for cockpit. £150
Anchor ball. £22
Radar reflector (approx). £300 (depends on type)
Fire extinguisher update. £150
Grab bag with torches, signal mirror etc. £90
Procedure manual. £55
Flares. £215
Sundries allowance. £200
 
Mikehp0 said:
>>I would be astounded if you can cover the cost of coding with just 15 days charter work.

Here's what I've been quoted:

Inspection and certification cost. £735
2 life rings. £84
Signage. £40
NUC lights. £85
Kedge anchor. £72
Life raft hire (10 man). £300/year
10 auto life jackets. £820
First aid kit. £65
Safety wire for cockpit. £150
Anchor ball. £22
Radar reflector (approx). £300 (depends on type)
Fire extinguisher update. £150
Grab bag with torches, signal mirror etc. £90
Procedure manual. £55
Flares. £215
Sundries allowance. £200
Click to expand...

I think you need to separate the costs into capital outlay and recurring costs.
First thing that I dont see is the 2 or 3 days (your time) each year while the coding and inspection is being done.You will need regular out of water survey as well.
 
>>I think you need to separate the costs into capital outlay and recurring costs.

does this look better?

ANNUAL COSTS
Inspection and certification cost. £735 - IS THIS EVERY YEAR? - WILL ASK MY GUY WHETHER THIS INCLUDES OUT OF WATER ELEMENT - WOULD AIM TO COMBINE WITH ANTI-FOUL AND SERVICE
Life raft hire (10 man). £300
10 auto life jackets. £300 SERVICE
Fire extinguisher update. £150/5 = £30 PER YEAR
Sundries £200
no cost for my time - I'd pay to be there!
TOTAL £1500

CAPITAL COST
2 life rings. £84
Signage. £40
NUC lights. £85
Kedge anchor. £72
10 auto life jackets. £820
First aid kit. £65
Safety wire for cockpit. £150
Anchor ball. £22
Radar reflector (approx). £300 (depends on type)
Fire extinguisher update. £150
Grab bag with torches, signal mirror etc. £90
Procedure manual. £55
Flares. £215
Sundries allowance. £200
TOTAL £2500
 
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Mikehp0 said:
>>I think you need to separate the costs into capital outlay and recurring costs.

does this look better?

ANNUAL COSTS
Inspection and certification cost. £735 - IS THIS EVERY YEAR? - WILL ASK MY GUY WHETHER THIS INCLUDES OUT OF WATER ELEMENT - WOULD AIM TO COMBINE WITH ANTI-FOUL AND SERVICE
Life raft hire (10 man). £300
10 auto life jackets. £300 SERVICE
Fire extinguisher update. £150/5 = £30 PER YEAR
Sundries £200
no cost for my time - I'd pay to be there!
TOTAL £1500

CAPITAL COST
2 life rings. £84
Signage. £40
NUC lights. £85
Kedge anchor. £72
10 auto life jackets. £820
First aid kit. £65
Safety wire for cockpit. £150
Anchor ball. £22
Radar reflector (approx). £300 (depends on type)
Fire extinguisher update. £150
Grab bag with torches, signal mirror etc. £90
Procedure manual. £55
Flares. £215
Sundries allowance. £200
TOTAL £2500
Click to expand...

Thats more like it. Its probably time to get more details in the inspections and go to the accountant, otherwise its having this forum drag a fine toothed comb through your private business (almost never a pleasant process)

I have just been helping get a 15m raggie through this, there were quite a few nasty surprises along the way, one thing that hepled though was a pre inspection visit from the inspector, e gave us some very useful pointers.
 
Mikehp0 said:
>>I think you need to separate the costs into capital outlay and recurring costs.

does this look better?

ANNUAL COSTS
Inspection and certification cost. £735 - IS THIS EVERY YEAR? - WILL ASK MY GUY WHETHER THIS INCLUDES OUT OF WATER ELEMENT - WOULD AIM TO COMBINE WITH ANTI-FOUL AND SERVICE
Click to expand...

Through the RYA, out of water inspection was every 5 years, with an additional surveyors in-water inspection mid way between. Self certification annually. I was able to self certify the lifejackets as well for the first 3 years from new, though other surveyors seem to insist on annual third party inspection.
 
Google "MGN 280" This is the main guidance for a small workboat. I see no reason why your plan would not work. The key I think is the relationship between you and the skipper with whom you're going to do the business with. Get the ground rules sorted!!
 
IIRC - you appear to be coding for 10PoB so you will need 12 lifejackets.
First thing I would have done is the stability test for the number of PoB.

Solas lights for lifejackets?
Crotch straps?
Lead lines?
YBDSA registration?
EPIRB?
 
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Mikehp0 said:
>>How many days charter can you get from investing the equity you have in the boat?

ah - well - good point and that takes us into the realms of psychology. Owning a boat gives me pleasure. When I'm stuck at work, I'm thinking about it. I'll take any excuse to go see it - do office work on it, read a book on it etc. Chartering and bedsonboard will curtail this somewhat but that's no bad thing - I have a job I need to keep! However, there's more man maths at play here. My boat gives us 2 weeks of holidays per year. That's worth about £10-£15k per year. If I can offset the running costs and factor in the holidays, I've got free boating.
Click to expand...

Man maths certainly does apply!

You also have to bear in mind that the charter period is likely to coincide with when you want to use it yourself.

Also factor in cost of refunds if and when the boat has problems. Even the best run charter boats experience issues and when you've got a group booked for a day you'll need to get them home and keep them happy. Very few turn a profit on boats of this type - just look around the Yacht Haven or Berthon and only the very large boats like Rum Jungle & Hush, fishing boats, dive boats or RIBS are making money.

Out of interest what do you expect to charter her out for? £800 a day with a skipper?
 
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