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VAT on new boats sold as a a live aboard

I have decided to buy a Brayzel 45 x 10 dutch style boat. It was on show at Crick. I often see boats marketed as no VAT, can you advise or point me in the right direction. Also in terms of payment. Andrew at Brayzel, suggested a large deposit, but I have decided to pay for the boat apart from the final extras, ie I'll own what I see at the moment, so I own the boat, in the unlikely case they go bust. I presume I don't need a survey just some pre-hand-over checks, and RCD,Dec of Conf. Is that a reasonable approach? Many thanks,

Asked by: Michael Connaughton  | 8.41am, Tuesday 27 June

WW says:

The question of VAT on inland boats is not an easy one and, to make matters more complicated, it changes every so often.

  • If the boat a houseboat with no means of propulsion - in other words, a floating caravan - it is VAT exempt.

  • If it is capable of moving under its power, It must satisfy two conditions in order to be VAT exempt -

  • it must not be designed or adapted for recreation of leisure. Liveaboard and recreational boats share many common features so you would have to show that the primary aim in designing the boat was as a permanent residence.

  • It must have a gross tonnage of more than 15 tons. In this case, tonnage has little to do with the actual weight of the boat but is calculated using the formula - length x width x height of the hull (all in metres) x 0.16. In order to qualify under this rule, the boat would have to be considerably larger than the one you have in mind.

  • As far as payment for the boat is concerned, the norm is to pay a relatively small holding deposit to secure the building slot and then pay by instalments in arrears as the work proceeds. Most builders use the British Marine Federation contract, or one of their own based on it, which envisages this method of payment. This should ensure that, should the worse come to the worst, you can prove that you own the part-completed boat and can have it finished by another builder.

  • It is unusual, but not unheard of, for a buyer to employ a marine surveyor to oversee the work and confirm that the end result is as it should be.

    Graham Booth  | 11.33AM, Tuesday 27 June

    Readers say:

    thanks, the boat is already built, it's actually the boat which was on show at Crick. So I'm paying fir everything, but the final fitting.

    Michael Connaughton  | 12.50PM, Tuesday 27 June

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