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Posted: Fri Feb 12, 2016 10:24am

Post Subject: requirements for no-vat-boats

Hello, I read that one can buy some boats without paying vat if they are used more for living aboard. What is required for that? Do I have to live on the boat permanently or would a use as "floating holiday cottage" suffice? Is the configuration of the boat important? Greetings from Germany.


Posted: Fri Feb 12, 2016 3:12pm

Post Subject: requirements for no-vat-boats

As you have asked on a UK magazine website I will give you the best answer I can for a boat in the UK. I have no knowledge of German VAT rules. The UK rules are: The supply of a ‘qualifying’ ship, along with repairs, maintenance and work on and certain supplies and parts for a ‘qualifying’ ship, can be zero-rated in the UK. For VAT purposes, a ‘qualifying’ ship is one that has: a. A gross tonnage of not less than 15 tons; and b. Not been designed or adapted for use for recreation or pleasure. Zero-rating can also extend to certain vessels used for residential accommodation:  Houseboats without engines are zero-rated (under a separate specific provision)  Dutch barges & similar, designed & supplied for use as permanent residence. The 15 tones is not ordinary weight as you may weigh on scale or a weighbridge. It is related to the weight/volume of the cargo it can carry which means it is virtually impossible for a narrowboat to qualify although if it had very high hull sides and a very squat cabin it might but it would look very odd. It is possible for a wide beam "Dutch barge" type boat to qualify. The subject is complex and because the builder would be the one to pay VAT if HMRC decided the boat should be VAT rated after you paid for it you might find that some builders would not want to get involved. If you can find a builder with an annual turnover of less than the VAT freehold (a bit over £70,000 I think) you should not be charged for VAT but VAT would have been paid on all the materials so it may not work out much cheaper and by definition it will be a small very low volume builder who may go bankrupt. If you are importing into the EU then I understand that islands in the Azores have a low VAT rate so by brining a boat into the EU there and paying VAT can be cheaper than bringing it straight into a major EU country. Before going ahead with a VAT free purchase please take further advice.

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