Chartering out your boat

[Paul_S123]

Just wondered who had chartered out your boat...picking brains really. Sitting here on my boat, dreaming of retiring and making a supplemental income grabbing some unsuspecting tourist from Marbs...and giving them a day out on the boat.

What in your experiences are the pitfalls etc of this?

 

[simonfraser]

Legally it cant be done, all sorts for tax / insurance / liability issues.

 

[Paul_S123]

There's quite a few boats available for skippered charter here....

 

[Portofino]

Legally it cant be done, all sorts for tax / insurance / liability issues.

Add skippers commercial qualifications to the list of barriers .

 

[nortada]

Whilst in the UK, it for 3 years but only skippered charter (never bare boat).

Boat has to be coded for commercial use, equipped accordingly and regularly inspected. The skipper has to hold the appropriate qualifications. The marina may charge a premium on your berth. Then there is insurance which should include public liability. You will have to run proper accounts and pay appropriate local and UK taxes.

Don’t forget any EVA/VAT liability. If you haven’t already got one, it could be a good idea to get a T2L from HMRC Salford.

https://www.tapatalk.com/groups/lag...ide-memoir-british-flagged-vessels-t1885.html

If based overseas, there will be local rules and requirements that will have to be adhered to and depending where you are can be onerous. There may be local taxes. As these rules vary, it might be a good idea to identify your host country at the beginning. As the locals will bubble you, DO NOT CONSIDER OPERATING UNDER THE RADAR.

Hard work to establish and maintain your market.

We worked in a cooperative supplying corporate sailing. This paid very well but in recent years as costs and rules escalated, this market largely dried up or was taken over by ‘the big boys’.

A negative pictureThat could become even more negative post Brexit.

Worked well for the limited time we did it but would not go there again; certainly not overseas

 

[nortada]

Legally it cant be done, all sorts for tax / insurance / liability issues.

Add skippers commercial qualifications to the list of barriers .

I am a qualified commercial skipper and from personal experience it can be done - but it is not an easy option.

Adequate research is essential.

We started by speaking with specialists at the HMRC, who first carried out a tax investigation on us but subsequently prove very helpful, with tons of good advise. We even had an ex-revenue present our annual tax returns and save us fare more money than he cost️

There is a legal cooperative operating in Lagos and some of these skippers are operating on UK (not Portuguese) qualifications.

Understand it is far more difficult to do in Spain where you may have to matriculate and re-flag your vessel. Then take Spanish qualifications (in Spanish). Others on this forum will be able to advise in Spain and possibly Greece etc.

Possibly speak with potential competitors in your area of interest and consider joining (or forming) a cooperative.

 

[Bouba]

Far easier to rent your house out while you’re on your boat

 

[Portofino]

Far easier to rent your house out while you’re on your boat

Landlords insurance ?
Gas appliance test cert(s) ?
Same tax treatment - undeclared income if they ( during an investigation) find the rent entry on a bank statement.
Tenant deposit scheme , UK Rev in U.K. have access to that list ..........agents and punters will want to use that scheme .

There’s probably more ........- ve, s

 

[petem]

Landlords insurance ? £150-£250 (probably minimal overhead on top of existing insurance house nsurance)
Gas appliance test cert(s) ? £70
Same tax treatment - undeclared income if they ( during an investigation) find the rent entry on a bank statement.
Tenant deposit scheme , UK Rev in U.K. have access to that list ..........agents and punters will want to use that scheme . £15

There’s probably more ........- ve, s

Biggest negatives are that you need to move all your belongings into storage.

 

[petem]

Just wondered who had chartered out your boat...picking brains really. Sitting here on my boat, dreaming of retiring and making a supplemental income grabbing some unsuspecting tourist from Marbs...and giving them a day out on the boat.

What in your experiences are the pitfalls etc of this?

Paul, if you're confident and suitably qualified you could offer to skipper other people's boats for them. The guys that looks after my boat spends most days in the summer taking other people out on their own boats (usually 50-65ft jobs). There are plenty of people out there willing to pay a couple of hundred €'s for the day so that they can relax, have a drink etc.

 

[nortada]

Paul, if you're confident and suitably qualified you could offer to skipper other people's boats for them. The guys that looks after my boat spends most days in the summer taking other people out on their own boats (usually 50-65ft jobs). There are plenty of people out there willing to pay a couple of hundred €'s for the day so that they can relax, have a drink etc.

Good idea but I would suggest you still invest in personal public indemnity liability insurance.

Costs very little so even though I am no longer ‘working’, I still have my cover.

 

[lynallbel]

The first two are cheap enough to sort out.
Tax is only going to go one way!
If you dont take a deposit then theres no need for the deposit protection.

Get bad tenants and you get to cry into your beer.

 

[Deleted User YDKXO]

Chartering out your boat

Having dabbled a bit in this when I had my boat in Majorca, I would say this

1) You will have to get the boat coded and that might cost thousands if not tens of thousands of pounds
2) By offering your boat for charter, you are subjecting yourself to the laws governing business in that country which might include registering for VAT and charging VAT on charter fees and liability to other taxes and regulations
3) Assuming you are UK tax resident, I believe you will have to declare any charter income and offset expenses in your tax return so you will very likely be having conversations with HMRC which might well involve an accountant
4) By chartering your boat you are adding engine hours and possibly causing interior and exterior deterioration to your boat. Any savvy used boat buyer will know that your boat has been chartered, especially if specific mods have been made to meet the requirements of coding, and mark the value of your boat down when you come to sell it. In fact the extra depreciation may well cost you more than any charter income you earn

Having said this, there are many charter boats out there so somebody must be making a success of it. However I believe those people are ones who approach the exercise as a business. In other words they run it through a company, employ a professional skipper and crew, advertise it properly and ensure they get more than enough charter weeks in a year to cover the extra depreciation and running costs. Unfortunately that means that you as the owner may not get to use your boat when you want and as much as you want

 

[nortada]

Having dabbled a bit in this when I had my boat in Majorca, I would say this

1) You will have to get the boat coded and that might cost thousands if not tens of thousands of pounds
2) By offering your boat for charter, you are subjecting yourself to the laws governing business in that country which might include registering for VAT and charging VAT on charter fees and liability to other taxes and regulations
3) Assuming you are UK tax resident, I believe you will have to declare any charter income and offset expenses in your tax return so you will very likely be having conversations with HMRC which might well involve an accountant
4) By chartering your boat you are adding engine hours and possibly causing interior and exterior deterioration to your boat. Any savvy used boat buyer will know that your boat has been chartered, especially if specific mods have been made to meet the requirements of coding, and mark the value of your boat down when you come to sell it. In fact the extra depreciation may well cost you more than any charter income you earn

Having said this, there are many charter boats out there so somebody must be making a success of it. However I believe those people are ones who approach the exercise as a business. In other words they run it through a company, employ a professional skipper and crew, advertise it properly and ensure they get more than enough charter weeks in a year to cover the extra depreciation and running costs. Unfortunately that means that you as the owner may not get to use your boat when you want and as much as you want

Agree this very full answer. When we did it we were a company and ran it as a business.

Hard work - yes. A nice little side line - no️

Did we enjoy those 3 years - yes. Would we do it again - no

I should add that for our specific circumstances - coming out of highly paid employment with a corresponding high income tax liability, we were able to offset annual losses against up to 3 years previous income tax. This changed the whole aspect of the operation from loss to profit. After 3 years this concession no longer applied.

Oh yes, we had a very competent accountant accountant, who had been a well respected tax inspector in a previous existence. His advice was invaluable

Possibly a clue there.?

 

[volvopaul]

Landlords insurance ?
Gas appliance test cert(s) ?
Same tax treatment - undeclared income if they ( during an investigation) find the rent entry on a bank statement.
Tenant deposit scheme , UK Rev in U.K. have access to that list ..........agents and punters will want to use that scheme .

There’s probably more ........- ve, s

Nothing too hard being a landlord as long as you vet your tenants , pay your tax and treat your tenants with respect , I’m not sure the amount of capital you have to invest is the greatest idea in the world but it works for me.

Short term tenancy can be a nightmare I’m told , out of all my experience I’ve had more aggravation from the one agency I used than the actual tenants , some of them are real cowboys that have no respect for the tenants or the landlords .

 

[volvopaul]

Good idea but I would suggest you still invest in personal public indemnity liability insurance.

Costs very little so even though I am no longer ‘working’, I still have my cover.

Anyway back to the OP,
I’ve just had a week in holiday in Ibiza , Santa Eulalia to be precise , a 750 berth marina , the second largest on the island I’m told .
The amount of boats for rent and charter was very high , over the week not many moved at all , to say it’s high season they are either too expensive for the average Joe on holiday or the wrong type of boats .
Most were old sunseeker’s , Some re engined with D4 or D6 , repainted and new ish upholstery , a few Cranchis and then the high end 60 ft plus Sunseeker’s .

We did see boats .co.uk Princess 72 there for 3 days , the one that’s featured in this months MBY , reading how much it costs to me was eye watering and would be a once in a lifetime holiday for the likes of me .

 

[Rocksteadee]

As mentioned, rent your house.
If you rented your house most would give it to a letting agency and for their 11 or so % they do the vetting collect rent sort deposit and so on.
Do the same with your boat, give it to a teaching school or charter company, they do (or will tell you what you need to do) insurance vetting skippering etc

 

[Paul_S123]

LOL...thanks for the replies so far...not going to rent out my house, but we have had some interesting comments.

 

[differentroads]

I was encouraged by an osteopath in a port in the Balearics to take paying passengers at 25€ a day. Lots of yachts did it, he said. And I've met a couple of Spanish yachtsmen who do just that, though I don't know what they charge but I know that they are not coded and doubt that they comply with any other relevant regs.
I've no interest in doing this myself, don't need the money nor hassle, and certainly not encouraging anyone else to. Just saying it happens.

 

[PowerYachtBlog]

Having dabbled a bit in this when I had my boat in Majorca, I would say this

1) You will have to get the boat coded and that might cost thousands if not tens of thousands of pounds
2) By offering your boat for charter, you are subjecting yourself to the laws governing business in that country which might include registering for VAT and charging VAT on charter fees and liability to other taxes and regulations
3) Assuming you are UK tax resident, I believe you will have to declare any charter income and offset expenses in your tax return so you will very likely be having conversations with HMRC which might well involve an accountant
4) By chartering your boat you are adding engine hours and possibly causing interior and exterior deterioration to your boat. Any savvy used boat buyer will know that your boat has been chartered, especially if specific mods have been made to meet the requirements of coding, and mark the value of your boat down when you come to sell it. In fact the extra depreciation may well cost you more than any charter income you earn

Having said this, there are many charter boats out there so somebody must be making a success of it. However I believe those people are ones who approach the exercise as a business. In other words they run it through a company, employ a professional skipper and crew, advertise it properly and ensure they get more than enough charter weeks in a year to cover the extra depreciation and running costs. Unfortunately that means that you as the owner may not get to use your boat when you want and as much as you want

Spot on. I will add that here locally many are doing charters as a side business. Do they find out that running and keeping a boat of ten or above meters is too expensive?
As a side note having sold boats to customers who then use it for charter, the real problem is that in the end it might end as that your boat is not yours anymore and become more a business then anything else.
I would ponder about this first before doing anything else.