VAT on mooring fees

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water dog

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Does anybody know what qualifies a houseboat for VAT exemption on residential mooring fees? I've looked it up and spoken to HMRC but can't yet get any definitive answer. It seems that my boat might be a 'qualifying ship' because it seems to meet all the criteria but I would really like to know for sure....
 
welcome to the forum

Are you referring to here? www.gov.uk/guidance/vat-treatment-of-caravans-and-houseboats-notice-70120 If so 7.1 and 7.2 seem pretty clear. You also need to meet the requirements including tonnage measurement in section 2 here www.gov.uk/guidance/ships-aircraft-and-associated-services-notice-744c#ships-and-qualifying-ships . This would normally be carried out by the builder or a recognised surveyor It is up to the mooring supplier to determine whether VAT is applicable as they are responsible for accounting for VAT. They would look for the relevant paperwork to support zero rating.

Where do you think the confusion exists in respect of your boat?
 
Thanks for your reply - well it seems reasonably clear to me but HMRC seem to think there's a grey area maybe - my boat is way above the required tonnage as it is an ex RMAS fleet tender and meets all the criteria for a 'qualified ship' as far as I can see but there is this in section 2.2 about what is a ship:
Exclusions include both:

  • fixed oil and gas installations (even though they might be transported to a site as a floating structure)
  • vessels which are permanently moored (for example as attractions) and not readily capable of navigation
I am moored on a residential mooring and don't go anywhere so I wonder does that apply to me?

I'm just kind of impatient to know - I am getting a call back on Tuesday from HMRC hopefully by someone who actually knows but I want to know now!
 
water dog said:
Thanks for your reply - well it seems reasonably clear to me but HMRC seem to think there's a grey area maybe - my boat is way above the required tonnage as it is an ex RMAS fleet tender and meets all the criteria for a 'qualified ship' as far as I can see but there is this in section 2.2 about what is a ship:
Exclusions include both:

  • fixed oil and gas installations (even though they might be transported to a site as a floating structure)
  • vessels which are permanently moored (for example as attractions) and not readily capable of navigation
I am moored on a residential mooring and don't go anywhere so I wonder does that apply to me?

I'm just kind of impatient to know - I am getting a call back on Tuesday from HMRC hopefully by someone who actually knows but I want to know now!
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Have you not read 7.2 in the link? Based on what you say your boat does not qualify because it is capable of propulsion - even if the engines are removed.

The VAT exemption is very specifically written to cover only residential properties that happen to be on the water. It does not cover leisure or commercial craft that are used for living aboard. It does not matter if you never go anywhere.
 
That only applies to VAT on the supply of a new boat NOT VAT on moorings which is covered by the first link I gave. Wide beams would still pay VAT on mooring fees.
 
Tranona said:
Have you not read 7.2 in the link? Based on what you say your boat does not qualify because it is capable of propulsion - even if the engines are removed.

The VAT exemption is very specifically written to cover only residential properties that happen to be on the water. It does not cover leisure or commercial craft that are used for living aboard. It does not matter if you never go anywhere.
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Yes but there's this : For the purpose of qualifying ship and VAT liability legislation, a residential vessel is not a houseboat (see paragraph 2.7).
And:

2.3 A qualifying ship​

A ‘qualifying ship’ is legally defined as any ship that has a gross tonnage of not less than 15 tons and is not designed or adapted for use for recreation or pleasure.

2.4 How to determine whether your vessel has been designed for use for recreation or pleasure​

You need to consider the nature of the vessel’s design. To be a qualifying ship it must be designed for commercial purposes or to be used for permanent residential living by the owner. Your vessel is not a qualifying ship if it does not have a design suitable for permanent residential living, or have any features that indicate a commercial design, such as:

  • a cargo hold
  • commercial fishing equipment
  • the ability to convey large numbers of passengers
 
And 2.7 refers you to the document Tranona mention and section 7.2 covers houseboats.

There's only a few groups of people who can make decisions on VAT and that is HMRC, expensive Lawyers / accounts imho.
 
Yes, I'm waiting to hear from HMRC but just trying to get my head around it before I do. Is it saying that the only reason I am not a 'qualifying ship' is because I am permanently moored I wonder. And I wonder what 'permanently moored' actually means. I mean I'm moored here for now and have been for a while but i could move if I wanted to.
 
water dog said:
Yes, I'm waiting to hear from HMRC but just trying to get my head around it before I do. Is it saying that the only reason I am not a 'qualifying ship' is because I am permanently moored I wonder. And I wonder what 'permanently moored' actually means. I mean I'm moored here for now and have been for a while but i could move if I wanted to.
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Sorry but you are not reading it correctly. It may be a qualifying ship for the purposes of VAT on construction - that is the "rule" that is use for wide beam boats as explained in post#5 The rules governing VAT on moorings is in the first link section 7 and specifically excludes boats like your used for residential purposes. Wide beams even if VAT is not charged on first sale will still pay VAT on moorings, because like your boat they do not meet the definition in section 7.

So nothing to do with where you are moored, all to do with your boat not meeting the requirements.
 
Tranona said:
Sorry but you are not reading it correctly. It may be a qualifying ship for the purposes of VAT on construction - that is the "rule" that is use for wide beam boats as explained in post#5 The rules governing VAT on moorings is in the first link section 7 and specifically excludes boats like your used for residential purposes. Wide beams even if VAT is not charged on first sale will still pay VAT on moorings, because like your boat they do not meet the definition in section 7.

So nothing to do with where you are moored, all to do with your boat not meeting the requirements.
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Sorry for being stupid but what does this mean then?

VATLP17000 - Mooring and aircraft storage (Item 1k)​

Provision of mooring facilities​

The provision of facilities for mooring, berthing or storage of a ship or boat, or for housing or storage of an aircraft, is normally a standard rated supply under item 1 (k). However, if a boat qualifies as a ‘houseboat’ under the definition given at Item 2, Group 9, Schedule 8, VAT Act 1994, mooring facilities will be exempt. Mooring for a ‘qualifying ship’ may be zero rated - see Notice 744C Ships, aircraft and associated services.

Notice 701/20 Caravans and houseboats and section 21 give further details concerning supplies made in connection with houseboats.
 
water dog said:
Sorry for being stupid but what does this mean then?

VATLP17000 - Mooring and aircraft storage (Item 1k)​

Provision of mooring facilities​

The provision of facilities for mooring, berthing or storage of a ship or boat, or for housing or storage of an aircraft, is normally a standard rated supply under item 1 (k). However, if a boat qualifies as a ‘houseboat’ under the definition given at Item 2, Group 9, Schedule 8, VAT Act 1994, mooring facilities will be exempt. Mooring for a ‘qualifying ship’ may be zero rated - see Notice 744C Ships, aircraft and associated services.

Notice 701/20 Caravans and houseboats and section 21 give further details concerning supplies made in connection with houseboats.
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The link I gave is the HMRC VAT guidance note for the Act to which you refer. Read 7,2 again. Your boat does not comply with the requirements for a houseboat for these purposes because it is "capable of self propulsion" It does not matter that it is a "qualifying" ship for other purposes.

VAT on new builds is completely different legislation and its purpose is to differentiate such boats from leisure craft which are subject to VAT as means of transport.
 
Tranona said:
The link I gave is the HMRC VAT guidance note for the Act to which you refer. Read 7,2 again. Your boat does not comply with the requirements for a houseboat for these purposes because it is "capable of self propulsion" It does not matter that it is a "qualifying" ship for other purposes.

VAT on new builds is completely different legislation and its purpose is to differentiate such boats from leisure craft which are subject to VAT as means of transport.
Click to expand...
So according to HMRC I am a qualifying ship - so zero rated for VAT on mooring fees.
 
water dog said:
So according to HMRC I am a qualifying ship - so zero rated for VAT on mooring fees.
Click to expand...
No. You have to fulfil the requirements of being a houseboat for the purposes of the regulations and as I have now told you at least 4 times from what you say about your boat it does not. Please read section 7 - it could not be more clear. It is for your mooring supplier to charge you VAT at the correct rate and if he does not he is open to a challenge from the VAT inspector. You have no choice in the matter. If you think you qualify take it up with your supplier and pretty sure he will refer you to section 7.
 
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