Company ouned and vat

[Seastoke]

Ok so we own a boat of not much value got no vat receipt but old boat can i transfer the boat to company, so i can claim vat back on mooring etc ? Is it that simple

 

[henryf]

Providing the boat is used as a legitimate buiness. This would normally be charter although there are other options, tuition, etc. To be a commercial boat it will have to be coded, annual inspections, you will need commercial qualifications etc.

You will also have to pay when you want to use the boat just like everyone else.

You will need to have a legitimate business when they come to inspect you, and they will.

Unlikely to be economic.

Henry

 

[lpdsn]

Ok so we own a boat of not much value got no vat receipt but old boat can i transfer the boat to company, so i can claim vat back on mooring etc ? Is it that simple

Obvious answer is to talk to your accountant.

UK I presume. It would need to be genuinely used for a business purpose (usually chartering) and you would have to charge yourself for using the boat for private purposes - it's amazing how little of the money a consumer spends actually makes it to the owner of the business, so your money won't go around the loop for long.

I've never looked into treating it as a benefit in kind in the UK, so that's one option. I wouldn't hold out much hope for it though.

And you'd have to account for VAT when you sell the boat.

Oh, and you'd have to be VAT registered, so a regular mound of paperwork.

 

[Lulla-Belle]

I have been through this an we use the boat for entertaining!

Have had an inspection and hmrc were quite happy we only claim mooring fees and a percentage of our maintenance but everything counts!

We do not reclaim vat on fuel and we do not take customers out to sea!

 

[henryf]

I'm not sure that legally you can have people on board commercially - which is what entertaining clients is, and not have the boat coded in some way even if you don't set sail. I am assuming the boat is capable of putting to sea and does so when clients are not being entertained.

It's a bit like sleeping off a few drinks in the back of your car. You will still get done for drink driving.

With regard HMRC being happy in your case do not assume this will be so globally. Take advice from a professional. You could end up in a world of pain whilst trying to save a few pounds.


Henry

 

[Jim@sea]

So you transfer the boat to your Ltd Co and when you sell it you have to charge VAT.

 

[henryf]

So you transfer the boat to your Ltd Co and when you sell it you have to charge VAT.

No you won't. I suspect it will be Vat exempt in the same way a used car would be because VAT was not claimed on the purchase. With a van or other commercial vehicle VAT would have been re-claimed when purchased so must be charged on the sale price.

Once again seek professional advice but I think I'm right in what I say.

Henry

 

[Nigelpickin]

I'm not sure that legally you can have people on board commercially - which is what entertaining clients is, and not have the boat coded in some way even if you don't set sail. I am assuming the boat is capable of putting to sea and does so when clients are not being entertained.

It's a bit like sleeping off a few drinks in the back of your car. You will still get done for drink driving.

With regard HMRC being happy in your case do not assume this will be so globally. Take advice from a professional. You could end up in a world of pain whilst trying to save a few pounds.


Henry

It's a potential can of worms, we are receiving more and more requests from clients, wanting evaluations on their boats for use as furnished holiday lets.
The long and short is that its fine at present from the pov of coding, as long as the boat remains static for the duration.
There are however many other concerns....I could list but it would become a sales pitch.
My advice, do what I do, charter your house and live on the boat!

 

[lionelz]

Ok so we own a boat of not much value got no vat receipt but old boat can i transfer the boat to company, so i can claim vat back on mooring etc ? Is it that simple

I have looked into this, it is possible however, as with everything already said, it could be a lot of hassle for very little, it could be classed as aggressive avoidance and therefore the HMRC could come after you. There is also the issue that if you do use it you either pay for it or it becomes similar to a company car and as such will have personal tax issues. I suppose it depends on how big it is and how much to expect to save, easiest ways just pay your tax and sleep well at night knowing you have done the right thing and are not one of those being branded as a sponger of society like so many tax dodgers are being branded.

 

[Talulah]

No you won't. I suspect it will be Vat exempt in the same way a used car would be because VAT was not claimed on the purchase. With a van or other commercial vehicle VAT would have been re-claimed when purchased so must be charged on the sale price.

Once again seek professional advice but I think I'm right in what I say.

Henry

I think Henry you may be think of the Margin Scheme.
"However, for assets where VAT was not incurred at purchase and which qualify as second hand goods, the margin scheme can be used, with VAT due on the margin."

i.e. Car dealer pays VAT on the profit element of a second hand car he has bought.

 

[jrudge]

can i transfer the boat to company, so i can claim vat back on mooring etc ?

The original question was could the OP claim back VAT.

Now if we ignore all of the other legitimate issues raised, specifically on VAT you cannot set up a company with the aim of only making reclaims. They will wear it for a while, but income nil, claims x will eventually get disallowed as you are not trading.

It is it already a trading entity then all of the above comes into play. Possible yes, but only if legit.

I used to run a boat and plane finance company. There are LOADS of people with these type of assets in their company name. This is nil problem until someone takes a look and then the position will most likely get very unfriendly. You could go years without a VAT or Revenue enquiry, but if it happens .... We ran a business for 10 years. before selling it. All we had was one PAYE audit. It could just as well go the other way, and dealing with penalties and so on unless it is 100% legit is simply not worth the hassle for a few quid. Also remember once they find one thing they will probably have a bigger dig, and take the view that there is something going on.

For the VAT on moorings ( maybe £1000??) not worth it.

 

[lionelz]

can i transfer the boat to company, so i can claim vat back on mooring etc ?

The original question was could the OP claim back VAT.

Now if we ignore all of the other legitimate issues raised, specifically on VAT you cannot set up a company with the aim of only making reclaims. They will wear it for a while, but income nil, claims x will eventually get disallowed as you are not trading.

.

Forgot that part If you have not been charged VAT then you cannot claim it back on a product. so the simple answer is no you cannot claim the VAT back as you have not paid it

 

[Nigelpickin]

can i transfer the boat to company, so i can claim vat back on mooring etc ?

The original question was could the OP claim back VAT.

Now if we ignore all of the other legitimate issues raised, specifically on VAT you cannot set up a company with the aim of only making reclaims. They will wear it for a while, but income nil, claims x will eventually get disallowed as you are not trading.

It is it already a trading entity then all of the above comes into play. Possible yes, but only if legit.

I used to run a boat and plane finance company. There are LOADS of people with these type of assets in their company name. This is nil problem until someone takes a look and then the position will most likely get very unfriendly. You could go years without a VAT or Revenue enquiry, but if it happens .... We ran a business for 10 years. before selling it. All we had was one PAYE audit. It could just as well go the other way, and dealing with penalties and so on unless it is 100% legit is simply not worth the hassle for a few quid. Also remember once they find one thing they will probably have a bigger dig, and take the view that there is something going on.

For the VAT on moorings ( maybe £1000??) not worth it.

Completely agree and what about the other issues, for example as a business premises or a venue used by a business, what's your position going to be in terms of insurance?
Your regular insurance will probably be rendered pointless and you will need indemnity insurance for accidents and so on, I'm not sure that even exists...

Not worth the hassle imo and turns an enjoyable hobby into a pita.

 

[Seastoke]

hi guys points taken yes i think it is not worth it.thanks. the problem ? as stoke is the mobile phone vat capital we get jelous of the lambo,s etc

 

[henryf]

Forgot that part If you have not been charged VAT then you cannot claim it back on a product. so the simple answer is no you cannot claim the VAT back as you have not paid it

The question wasn't could vat be claimed on the boat, but the mooring fees which would have a vat element invoiced.

Henry