roly_voya
regular
Reged: 05/02/2004
Posts: 1049
Loc: Pembrokeshire Wales
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My partner has just transferred for employed status to self employed working as a consultant/trainner and will therefore be opperating as a company, I have a track record in management/leadership training using outdor activities. This leads me to wonder if it might be possible if we get the boat coded (meets 90% orf the standards anyway) to claim some VAT & tax back on the opporating costs. Pretty sure this is a 'tax dodge' rather than a seriouse buisness idea although would be happy to do some bits of trainning but wondered if anyone had tried something similar in UK home waters and if they found it worked.
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JCP
regular
Reged: 09/04/2007
Posts: 150
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I looked into it a couple of years ago. Basically, it's very difficult as it is seen as a tax dodge. To keep your tax affairs honest you have to charge yourself a charter fee including VAT when you use it.
I had a lengthy discussion with them about the VAT status and actually got nominal approval to buy a boat and reclaim the VAT, but I think the rules have got tighter each year. I think you'd really have to run the charter business yourself to be able to claim it is a genuine business and offering skippered charter would help. Just occasional charter with the usual use being by the owner would probably not convince them.
I did look at one boat that was second-hand, which was non VAT paid, where the owner seemed to have got it via his company and it had slipped under the radar of the then Customs & Excise. I got the distinct impression his accountant had urged him to get rid of it as quickly as poss.
I also chatted to someone who ran a boat for the entertainment of clients. He'd negotiated the tax liability before buying the boat so had managed to agree a substantially smaller figure than was originally suggested to him. He said if he'd simply bought the boat then negotiated, his tax liability would've been enormous.
Best of luck.
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"Most races are not won; they are lost by all those who do not finish first." - Stuart H Walker, Advanced Racing Tactics
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SirSnoozalot
regular
Reged: 25/05/2008
Posts: 862
Loc: East Coast UK
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1. Probably have to be a new boat, in order to get the VAT identified separately on the Tax Invoice (or so recent as it could be established). 2. Then, one needs to charge VAT on the sales, while not being able to actually reclaim much against costs. You'd probably end up paying them more VAT on the quarterly basis, which would wipe out the benefit.
However, with the impending fuel duty hike in November, it might be worth having the boat as a business and getting it MCA Coded as a training/charter vessel, in order to get the fuel duty rebate.
Always deal with them in writing, so you have a letter to show them in six years time when they assess you having forgotten they said you could do it.
And, as a boat is classed as "a means of transport" there have been rulings clearly stating that you cannot reclaim the VAT on purchase if the vessel has any "personal use"
They will happily send you the scope and coverage guides, leave it up to you how to interpret them, and in six years time, tell you you were wrong and hit you with a £30,000 bill.
Best option is to get yourself elected as an MP, then you can run the boat as an expense (tax-payer pays for it for you) and you don't even need to declare it.
Sorry, am I being a bit sarcastic?
There are other options: Set up a Cayman Islands or Bahamian consultancy Company with nominee directors. Domicile the business in Alderney. Register the vessel in the Channel Islands, trade in and out of the UK.
If you make too much profit from the UK operations, then the Offshore company simply invoices you for consultancy and administration fees so that your UK trading has been at a loss.
Edited by SirSnoozalot (25/05/2008 21:01)
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