Page 1 of 4 1234 LastLast
Results 1 to 10 of 33
  1. #1
    Join Date
    Apr 2007
    Posts
    5,144

    Default Buying an ex vat paid boat in the uk.

    I have seen an ex vat paid boat for sale here in the uk.
    According to the agent it's ex vat because it's done some charter, now I know if I bought it and kept it for private use I'd have to pay the vat as soon as I bought it.

    I have thought about buying it and using a skipper to do some occasional chartering to pay for it's upkeep. So do I.

    Have to create a charter company and register the company, obviously it would have to be limited, obviously show accounts to hm revenue etc, be fully insured and coded.

    The questions I'm not sure on is, would I have to pay the hm for private use which would be more time than chartering?. What other tax implications would I come across?.

    Would I just be better to buy the boat at the right price and pay the vat, then forget the charter company as it's probably just a way of avoiding the day I'd have to pay the hm.

    If say I bought the boat for example 220k and pay the 20% vat, or could I legally buy it, not pay the vat, do the chartering for a couple of years then sell the boat at it's Market value say 180k and then pay the vat on the 180k? Is that legal?

    Or am I just better to buy a uk boat that's vat paid.

  2. #2
    Join Date
    Sep 2006
    Posts
    1,746

    Default

    Quote Originally Posted by volvopaul View Post
    I have seen an ex vat paid boat for sale here in the uk.
    According to the agent it's ex vat because it's done some charter, now I know if I bought it and kept it for private use I'd have to pay the vat as soon as I bought it.

    I have thought about buying it and using a skipper to do some occasional chartering to pay for it's upkeep. So do I.

    Have to create a charter company and register the company, obviously it would have to be limited, obviously show accounts to hm revenue etc, be fully insured and coded.

    The questions I'm not sure on is, would I have to pay the hm for private use which would be more time than chartering?. What other tax implications would I come across?.

    Would I just be better to buy the boat at the right price and pay the vat, then forget the charter company as it's probably just a way of avoiding the day I'd have to pay the hm.

    If say I bought the boat for example 220k and pay the 20% vat, or could I legally buy it, not pay the vat, do the chartering for a couple of years then sell the boat at it's Market value say 180k and then pay the vat on the 180k? Is that legal?

    Or am I just better to buy a uk boat that's vat paid.
    Expect this to be another long long thread Paul....I can offer no advice other than to sit back over the next few days and enjoy the thread...;-)

  3. #3
    Join Date
    Apr 2007
    Posts
    5,144

    Default

    Quote Originally Posted by RobWales View Post
    Expect this to be another long long thread Paul....I can offer no advice other than to sit back over the next few days and enjoy the thread...;-)
    Thanks rob, I just need a straight answer from someone like jfm, but no dought he won't be sat in the rain like we are, more like the sun and I don't blame him, probably having wine poured to him by jimmy the builder no doubt!

  4. #4
    Join Date
    Sep 2006
    Posts
    1,746

    Default

    Quote Originally Posted by volvopaul View Post
    Thanks rob, I just need a straight answer from someone like jfm, but no dought he won't be sat in the rain like we are, more like the sun and I don't blame him, probably having wine poured to him by jimmy the builder no doubt!
    Can see it now....bar stuards lol

    Anyway off over the road myself for a couple of pints of the amber necter, catch up on the replies later.

  5. #5
    ANDY59 is offline Registered User
    Location : New Forest
    Join Date
    Oct 2008
    Posts
    1,395

    Default

    Why not just choose the amount you are happy to pay in your head and then make an offer less 20% and then pay the spare 20% to the vat man if the offer is accepted .

  6. #6
    Join Date
    Jul 2010
    Posts
    462

    Default

    Quote Originally Posted by ANDY59 View Post
    Why not just choose the amount you are happy to pay in your head and then make an offer less 20% and then pay the spare 20% to the vat man if the offer is accepted .
    surely its the seller who has to account for vat? if they're currently running it in a business, the business should charge vat on the sale and provide the vat invoice, shouldn't it?

  7. #7
    Join Date
    Nov 2007
    Posts
    19,420

    Default

    If you are buying from a VAT registered company and it is a business asset, you will get an invoice for the value of the boat plus VAT - the two together will be comparable with a similar VAT paid boat. So, if boats of that type are going for 120k - you should look to pay 100k plus VAT, so total price is the same. Obviously the actual value of a charter boat may well be lower than a private boat, but the principle is the same.

    If you want to avoid paying the VAT by using it as a business asset, you would have to set up the charter business in advance and register for VAT. You would have to convince HMRC that it is indeed a business and not a dodge. You need to talk to your VAT man as to what would be acceptable - but expect to be able to demonstrate that you have customers, you have the infrastructure to operate and your turnover is likely to be significant. You will of course have to then charge your clients VAT. You then buy the boat in the business name and reclaim the VAT as your input tax - you will get it back from the VAT man when you do your first return.

    If you use the boat yourself, it will be a benefit in kind and you will be taxed on it through your personal tax return. The benefit will be valued in relation to the commercial value of your use. So a weeks use by you privately will be taxed on the commercial value of a charter - at your marginal rate.

    While you operate the busines you will, of course account for input and output VAT in the normal way as well as offset your costs against your income. When you sell the boat your business will sell it for whatever you can get and you will have to account for the VAT - and give a VAT invoice to the buyer.

    When you have thought all that lot through you will probably drop the idea!

  8. #8
    ANDY59 is offline Registered User
    Location : New Forest
    Join Date
    Oct 2008
    Posts
    1,395

    Default

    Yes you are correct , i was thinking about the cost to Paul rather than who to pay

  9. #9
    Join Date
    Mar 2002
    Posts
    3,651

    Default

    You could possibly get a part VAT reclaim or scheme set up http://www.jryachts.com/dehler47forsale.htmlas it already has a scheme in place, but it has to be a real bonafide operation and be ok'd by HMRC.

    Its coded and has a new engine too.







    ....... its got sails as well
    Last edited by jonic; 27-04-12 at 23:17.
    John Rodriguez Yachts. Cruising & Bluewater Yachts www.jryachts.com

  10. #10
    jfm's Avatar
    jfm is offline Registered User
    Location : London/Antibes
    Join Date
    May 2001
    Posts
    17,799

    Default

    Quote Originally Posted by Tranona View Post
    If you are buying from a VAT registered company and it is a business asset, you will get an invoice for the value of the boat plus VAT - the two together will be comparable with a similar VAT paid boat. So, if boats of that type are going for 120k - you should look to pay 100k plus VAT, so total price is the same. Obviously the actual value of a charter boat may well be lower than a private boat, but the principle is the same.

    If you want to avoid paying the VAT by using it as a business asset, you would have to set up the charter business in advance and register for VAT. You would have to convince HMRC that it is indeed a business and not a dodge. You need to talk to your VAT man as to what would be acceptable - but expect to be able to demonstrate that you have customers, you have the infrastructure to operate and your turnover is likely to be significant. You will of course have to then charge your clients VAT. You then buy the boat in the business name and reclaim the VAT as your input tax - you will get it back from the VAT man when you do your first return.

    If you use the boat yourself, it will be a benefit in kind and you will be taxed on it through your personal tax return. The benefit will be valued in relation to the commercial value of your use. So a weeks use by you privately will be taxed on the commercial value of a charter - at your marginal rate.

    While you operate the busines you will, of course account for input and output VAT in the normal way as well as offset your costs against your income. When you sell the boat your business will sell it for whatever you can get and you will have to account for the VAT - and give a VAT invoice to the buyer.

    When you have thought all that lot through you will probably drop the idea!
    Paul
    The above is basically correct except (a) you wont get the vat back in your first return; it will take ages these days in UK and (b) you wont necessarily be taxed on a benefit in kind becuase that only applies where you set up a company to own the boat

    But Tranona's piece is necessary general and when you get into the specifics of a boat there is more. Devil in detail again. I have sent PM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •