VAT wrongly applied ?

[Jim@sea]

When checking how much it costs to store a caravan at a caravan site it appears that, being rent, there is no VAT. (Vat exempt)
And when I had my Agricultural Merchants business, being Vat registered, I also rented stables out which were treated as rent and I did not charge VAT.
How is it then where I have my boat, on the hard, I am being charged VAT.
I can understand that when the boat goes in the water and is on the Pontoon they are providing a "service" thus it becomes Vatable.
But I am only renting the land underneath my boat, thus it should be Vat exempt.

 

[superheat6k]

I would imagine that boat yards and marinas charge VAT because they expect they have to. Certainly never heard of not having to pay vat for 'storage', but seems a nice idea. No idea of the precise rules you elude to though. Tractors can use red diesel duty and vat free too, perhaps we could extend this no vat idea to the floating storage.

I'm up to saving the vat from my mooring, but i doubt it will happen any time soon.

 

[lpdsn]

I reckon there's quite a few bits and pieces of VAT overcharging by small companies as VAT is overly compex and HMRC never seen to complain about overcharging. You'd have to find out the rules that apply, then get through to someone senior on the finance side, then get them to check with their accountant, who will probably have to check with a specialist consultant.

I really did get one very large company to check (whilst specifying some software for them) and it took a few weeks before the judgement came back that the stupid, illogical, inconsistent way they charged their customers VAT was indeed correct.

 

[Momac]

vat rates here -

https://www.gov.uk/rates-of-vat-on-different-goods-and-services

.

 

[JumbleDuck]

When checking how much it costs to store a caravan at a caravan site it appears that, being rent, there is no VAT. (Vat exempt)
And when I had my Agricultural Merchants business, being Vat registered, I also rented stables out which were treated as rent and I did not charge VAT.
How is it then where I have my boat, on the hard, I am being charged VAT.
I can understand that when the boat goes in the water and is on the Pontoon they are providing a "service" thus it becomes Vatable.
But I am only renting the land underneath my boat, thus it should be Vat exempt.

Caravan storage is liable to standard rate VAT:

6.2 How should I treat the storage of touring caravans?

The storage of touring caravans is always standard-rated. This applies whether or not a specific area of land is granted to the caravan owner and includes contracts where the period of storage is in excess of one year.

https://www.gov.uk/government/publi...e-70120-caravans-and-houseboats#miscellaneous​

Since 2012 undercover storage of anything has been standard rate (https://www.gov.uk/government/publi...on-sheet-1013-provision-of-storage-facilities) as is the supply of car parking facilities (https://www.gov.uk/government/publi...erty/vat-notice-742-land-and-property#parking). Unless, of course, the operation in any of these cases is small and falls below the VAT threshold, which might explain the caravan storage place you asked.

Since boat storage almost always involves craneage, washing, propping and so on I would have expected it to count as a service rather than rent.

 

[alahol2]

It may be worth pointing out that club fees, moorings, storage ashore etc is (or can be) all zero rated.

 

[[2574]]

Mooring of boats is not an exempt supply of land and is specifically excluded from the property Exemption provisions. See below extract from VAT notice 742 "Land & Property"

"Leasing and letting of moorings generally standard-rated.

moorings for houseboats may qualify for exemption, see Notice 701/20 Caravans and houseboats.

if the mooring charge is for a “qualifying ship” the supply may be zero-rated, see Notice 744C Ships, aircraft and associated services. A “qualifying ship” is a ship of a gross tonnage of not less than 15 tons which is neither designed nor adapted for use for recreation or pleasure."

Should you wish to read notice 742 you can access it here: https://www.gov.uk/government/publi...and-property/vat-notice-742-land-and-property

In the situation of a members club VAT need not be charged (as mentioned above) in certain circumstances, worthy of further research if you are to follow this route. Interestingly there has been a recent Tax case, which HMRC lost, which determined that it was wrong for a members golf club to charge VAT on green fees to visiting players and therefore visitors fees should exclude VAT. That's an interesting precedent for sailing clubs with pontoons let to visitors, clearly it could add 20% to income.

Rob