Widebeam HMRC advice needed pleeeeeease!

[Bikervet]

Hi everyone!

 

I've just joined Canal World and have been overwhelmed by how supportive and helpful everyone is on here! What was supposed to be a 5 minute peek yesterday ended up being a 4 hour marathon reading through a lot of really useful posts by everyone. There is however one area I'm struggling to get my head around and the more I read into it, the bigger my headache becomes!

 

This is the dream, to leave land and live life on the water with our two dogs, to tear ourselves away from the ties of our house, pay back all the loans and enjoy life for once!! We run a business from home through social media, online training and offer live training to various venues around the UK that we would drive (or sail!) to, so a permanent residential mooring is not really necessary although the security of having a guaranteed place to moor is always handy without having to bear the anxiety of feeling the pressure to move every 2 weeks (and we would need to keep our car handy for work and leisure needs).

 

So far, we have sold the house, been to 3 car boot sales ridding ourselves of much loved possessions, visited a couple marinas, researched online and found a widebeam canal boat which we hope to buy if we can get the money from our house in time to buy it!! It's a 60 x 12ft widebeam. It's brand spanking new but being offered at a great price as the original owner pulled out of the purchase half way into it's build. We also are planning to go to the Crick Boat show to have a look at other widebeam models. Ideally we would like a new one and would consider building one and have it ready by Autumn to move into (apparently the New and Used Boat Company have a great turn around time but we are aware of planning all this at the time of the Crick Boat show, so I'm aware that this may take longer with anticipated increased sales).

 

So that's the plan, here's my question. Is anyone clued up on the HMRC issues? We will have no house so will have a liveaboard lifestyle. We hope to moor in and around the area of Berkshire due to family ties. Would this mean we would be able to buy our widebeam from a supplier/broker without VAT on top? It seems to be a very grey area with widebeams when it comes to tax exemption and qualifying ships with the HMRC. I know that barges and houseboats qualify and narrow boats don't. The two criteria that I'm aware of is that the boat should be above a gross tonnage of 15 which a 60x12ft widebeam seems to be the absolute minimum boat that does,and that it is to be used for a permanent liveaboard lifestyle with any leisure use being allowed as a secondary minor inclusion. I've read that if the engineering installed for any propulsion is the norm for this type of boat, then it should be accepted and we can maybe sign a declaration to the supplier that it will be used for liveaboard purposes. Does anyone know if or what proof of documentation I would need to present to a supplier/broker to prove this?

 

The other issue is the difficulty in obtaining a permanent residential mooring and whether we would find one in time when we plan to move into a boat (hopefully end of summer/autumn - we would ideally like to avoid moving into a boat in the middle of winter!). Long term leisure moorings do appear more readily available and would help settle our anxiety of not having anywhere to moor in time and no need to pay any council tax!. BUT, if we take this route, we officially aren't liveaboards right? and we would have to buy our boat inclusive of the VAT. Ideally, like anyone, we would prefer to buy the boat exclusive of VAT!!! Which we surely should qualify with living permanently on a boat?! Family in Berkshire can offer a residential address for post etc if necessary.

 

Does anyone have any advice on how we can avoid paying VAT but get an annual leisure mooring? I've heard many places may be 'ok' with keeping their heads down when it comes to having residential boaters in a leisure mooring....is this safe? Do people get in trouble doing this? Is there anything wrong with declaring permanent liveaboard use when purchasing the boat to avoid VAT but then, change our minds and go find a leisure mooring for a year until we can find a permanent residential mooring at a later stage? Would I put ourselves and the supplier at risk with the HMRC by doing this?

 

I would REALLY appreciate any advice from anyone who knows anything about what is the best thing to do!

 

Look forward to hearing about any ideas!!

 

Best wishes,

Bikervet

 

 

[RLWP]

Advice - forget it. you have to build a very specific style of boat to comply with the VAT exemptions. Even then, if HMRC say no, you have to pay VAT

 

Richard

 

MORE: Have a read of this: http://www.canalworld.net/forums/index.php?showtopic=64643&hl=%2Bhmrc+%2Bvat

Edited May 18, 2014 by RLWP

[Bobbybass]

Yup...very little chance of VAT exemption I'm afraid....

 

 

 

Editted to add:

 

Well done RLWP..I was looking for that link...

Edited May 18, 2014 by Bobbybass

[Guest]

Yup...very little chance of VAT exemption I'm afraid....

 

 

 

Editted to add:

 

Well done RLWP..I was looking for that link...

Mastering the forum search facility is indeed a dark art....

 

Some times I find that it can be tamed if you can remember who took part in a thread or even better who started it.......

[Alan de Enfield]

Just one other slight inconvenience but you cannot get a 'widebeam' from the South to the North (roughly from below Leicester to above Leicester) unless you have it craned out, road transported and craned back in.

 

I dont think that would work with your plan :

 

"..........training and offer live training to various venues around the UK that we would drive (or sail!)........"

 

You would certianly need to retain (or hire) a car

 

If you have been reading through some of the threads you may have noticed quite a few about C&RT enforcing the rules.

Meaningful enforcement has not been undertaken for many years, but now (and starting in the South and moving North) there seems to be a concerted effort to apply and enforce the rules. It is entirely your choice but Enforcement is only going to get 'better' so I would suggest you try and find a proper residential mooring - the days of 'keeping your head down' are numbered.

[Bod]

You are aware that wide-beams cannot travel the whole system?

 

Bod

[ditchcrawler]

Mastering the forum search facility is indeed a dark art....

 

Some times I find that it can be tamed if you can remember who took part in a thread or even better who started it.......

I often find it easier to use google including Canalworld in the search

[Southern Star]

I'm VAT registered, VAT has to be paid on anything I purchase although it can be offset against VAT I charge on invoices PROVIDED THAT THE PURCHASE IS FOR BUSINESS USE.

 

This is where your cunning plan falls down!

[RLWP]

I'm VAT registered, VAT has to be paid on anything I purchase although it can be offset against VAT I charge on invoices PROVIDED THAT THE PURCHASE IS FOR BUSINESS USE.

 

This is where your cunning plan falls down!

 

http://www.hmrc.gov.uk/briefs/vat/brief3809.htm

 

A qualifying vessel is tax exempt, as are houses

 

Richard

[Lady Muck]

You are aware that wide-beams cannot travel the whole system?

 

Bod

And that cruising a boat on the inland waterways is as fast as walking that distance? It could take you a few days to a couple of weeks to get to where the job is. When I'm cruising I find I spend a lot on trains, but at least the railways were built to compete with the canals, so you're never far from a station.

And when you say Berkshire do you mean Thames or Kennet and Avon?

[junior]

And when you say Berkshire do you mean Thames or Kennet and Avon?

Or the Slough Arm.

[Bikervet]

Hi everyone,

 

Thanks for your thoughts and that link was a really useful link thank you RLWP! The general consensus then seems to be a big no to the 0% VAT. It just seems weird when I've read on a reputable website that the absolute minimum 'qualifying ship' known would be the 12x60ft widebeam for the gross tonnage and with it being used for permanent living should qualify for 0% VAT. When we rang the New and Used Boat Company to enquire about building a widebeam for permanent living, her immediate response was ' that's good because you don't then have to pay VAT...'

It's so confusing!

 

I'm aware of some the limitations being in a widebeam, and it's unfortunate that we can't get to the northern waterways and certainly limited to many waterways in the south. However, our comforts are a high priority and with two dogs, and a few possessions we just can't get rid of, we felt that the widebeam was the way to go and would be happy to cruise short distances. We would rely on our car to get to most work appointments. We however sometimes don't work for a couple weeks before an appointment so if possible, could plan a nice slow cruise to the venue (if canal water ways allowing of course!). A lot of our work is in London and with family in Reading, staying on the Thames or Kennet and Avon canals would suit us fine. Finding a residential mooring may be difficult but, keeping to a length of 60ft makes things easier when finding a leisure mooring short term.

 

It may be worth asking the New and Used Boat Company why they think it's possible for tax exemption. I'll keep you all posted!!

 

Thanks again guys!

 

Regards

Bikervet

And in response to Southern Star, I guess our purchase is kind of for business use...? Not only will it be our home, it's also where our business headquarters will be ie. we work from home. Could that work in our favour???

[Alan de Enfield]

And in response to Southern Star, I guess our purchase is kind of for business use...? Not only will it be our home, it's also where our business headquarters will be ie. we work from home. Could that work in our favour???

 

If it is anything like working from home and declaring it - I doubt you would benefit.

 

All sorts of complications from business Insurance for a 'percentage' of the house with the rest being domestic insurance. Council Tax and Business Rates, capital gains tax comes into the 'business' portion of the house (may be not relevant on a boat which will be a decreasing asset) When you sell your house there can be a VAT liability on the business portion (as VAT was not paid on the whole house when it was bought).

 

This is a summary of the information I was given when I loked into it.

 

The problem is that once you have asked "the authorities" about it you are on their books as 'doing it' and you will never be left alone.

[Ex- Member]

 

If it is anything like working from home and declaring it - I doubt you would benefit.

 

All sorts of complications from business Insurance for a 'percentage' of the house with the rest being domestic insurance. Council Tax and Business Rates, capital gains tax comes into the 'business' portion of the house (may be not relevant on a boat which will be a decreasing asset) When you sell your house there can be a VAT liability on the business portion (as VAT was not paid on the whole house when it was bought).

 

This is a summary of the information I was given when I loked into it.

 

The problem is that once you have asked "the authorities" about it you are on their books as 'doing it' and you will never be left alone.

 

Excellent point. We work from the boat but mainly for telephone answering and accounting and invoicing. It would be ridiculous to try and claim a proportion of the boat's cost as tax refief. We obviously claim on equipment like office equipment, computers mobile phones. But keep the boat out of the equation IMHO

Edited May 19, 2014 by Julynian

[Bikervet]

Very true! I'll be asking the company that deals with all my books about that side of things and see what they say. No words can describe my feelings toward the HMRC, you work hard all your life only to give a fair proportion of it away to the HMRC! As a vet of 15yrs, I've had to pay them nearly a quarter of a million in taxes out of my hard earned money doing 12hr days and out of hours emergency call outs!! Not rich enough to get the freebies and not poor enough to enjoy the benefits. I believe I'm a decent hard working honest person that endeavours to play by the rules, but there are times when you think life is just not fair. We're just going to ring the boat company now. Watch this space!

[RLWP]

I'd cut to the chase and phone HMRC. No matter what a boat builder says, it will be you trying to persuade HMRC you don't owe them a load of money

 

Richard

[Alan de Enfield]

Just goes to show that the definition of "assume" is correct

 

Makes an ASS out of U and ME

 

Bikervet = Veteran Biker

[MtB]

I'd cut to the chase and phone HMRC. No matter what a boat builder says, it will be you trying to persuade HMRC you don't owe them a load of money

 

Richard

 

And if HMRC give you approval on the phone that your idea flies, write to them asking the same question, and obtain the same answer in writing.

 

Otherwise when it comes to reclaiming the VAT on the build, you could end up trying to cite a phone conversation you cannot prove ever happened.

 

 

MtB

 

 

 

(Edit to correct endless minor errors!)

Edited May 19, 2014 by Mike the Boilerman

[Grace and Favour]

I'd cut to the chase and phone HMRC. No matter what a boat builder says, it will be you trying to persuade HMRC you don't owe them a load of money

 

Richard

BikerVet: - the above is the best advice you could ever hope to get - - - remember, all the boat builder wants to do is sell a boat - - they won't worry if you have ensuing problems with HMRC!

[MtB]

BikerVet: - the above is the best advice you could ever hope to get - - - remember, all the boat builder wants to do is sell a boat - - they won't worry if you have ensuing problems with HMRC!

 

I disagree. A phone call to HMRC is the job only half done. Get it in writing.

 

It would be foolhardy to have to rely on advice received in a phone call should you end up in dispute with HMRC over it.

 

 

MtB

[Alan de Enfield]

 

I disagree. A phone call to HMRC is the job only half done. Get it in writing.

 

It would be foolhardy to have to rely on advice received in a phone call should you end up in dispute with HMRC over it.

 

 

MtB

 

Sage advice indeed - I had a big problem with our local Planning Department, during one of the telephine conversations I was told that "this has been checked by the county solicitor and it is correct" (it wasnt correct at all) - Surprisingly when it came to getting the MP and a QC involved there was no record of this conversation, and this was one of the days "when we will record your conversations for training purposes" that the 'tape' wasnt in use.

 

So - the conversation never happened.

 

All communications should be by email and ensure you have 'ticked' the 'mail received' and 'mail read' boxes.

[GUMPY]

One thing that should be noted is that a qualifying ship is not VAT free, VAT is charged at 0%, there is a very subtle difference and I believe this means that the responsibility for VAT lies with the seller not the buyer.

Just make sure if you do go ahead that the invoice says VAT charged at 0%.

[Alan de Enfield]

You could save a great deal on the VAT by buying it from 'another country'.

 

A boat can be imported into the UK without paying VAT as long as VAT has been paid somewhere in the EU.

 

Rates differ tremedously around the EU (for example Liechtenstein is 8% whilst Luxembourg is 15%, Norway & Sweden are 25% and Hungary is 27%)

 

So - get your mate in Liechtenstein to order the boat, when it comes to paying for it, it is charged at 8% VAT, he immediately sells it to you at his cost price.

 

So £100,000 boat invoiced in the UK would be £120,000 (20% VAT)

In Lichtenstein it would be £108,000 (8% VAT)

 

Having said that there is no doubt some HMRC 'catch-all' that the boat must actually leave the UK - however the saving of £12,000 would cover it being loaded on a boat and bought back again.

 

Just a thought ?

Edited May 19, 2014 by Alan de Enfield

[LoneEcho]

One of the companies that new & used use, build wide beams with very narrow gunwales and put stickers on the boat to state the fact. They apparently have successfully argued that because of the narrow gunwales, the gross tonnage calculation can be measured to the roof line.

The company I bought mine from (Viking) will only do VAT free on 70x12, as they use the measurement to the gunwales. This actually makes it cheaper to buy a 70x12 than a 60, and why you see a lot of 70' Vikings.

[LoneWolf]

You could save a great deal on the VAT by buying it from 'another country'.

 

A boat can be imported into the UK without paying VAT as long as VAT has been paid somewhere in the EU.

 

Rates differ tremedously around the EU (for example Liechtenstein is 8% whilst Luxembourg is 15%, Norway & Sweden are 25% and Hungary is 27%)

 

So - get your mate in Liechtenstein to order the boat, when it comes to paying for it, it is charged at 8% VAT, he immediately sells it to you at his cost price.

 

So £100,000 boat invoiced in the UK would be £120,000 (20% VAT)

In Lichtenstein it would be £108,000 (8% VAT)

 

Having said that there is no doubt some HMRC 'catch-all' that the boat must actually leave the UK - however the saving of £12,000 would cover it being loaded on a boat and bought back again.

 

Just a thought ?

 

oh dear oh dear

 

When i was doing my tax exams there was usually a question that went something like: "Your client has come to see you because his golfing buddy has told him about a good tax saving scheme ....[details of 'great wheeze'] and he would like to benefit also. Write a letter advising your client"

Then we would have to write a letter advising of all the different reasons why the scheme did not apply to your client or was otherwise a load of tosh

 

You are that golfing buddy