eco-boat

Absolutely! My boat and my business will be kept worlds apart. If HMRC sees any association between the two, the whole boat becomes liable for 20% VAT. I'm keeping every single receipt, for future scrutiny.

This is correct. I have been doing VAT returns for my business every three months for the past 12 years. On the sale side of the form, you enter a sale value and you enter the VAT you charged. For most businesses the VAT value is always 20% of the sale value, but when it isn't, alarm bells start ringing at HMRC. Boat builders who build live-aboard widebeams are an example of where the VAT value is significantly less than 20% of the sale value. HMRC sees this and investigates. My boat builder has experienced this a lot in the past, and as I have said previously, has even gone to court to fight HMRC and won. HMRC write the rules, the boat builder conforms to the rules, I pay zero VAT. It's that simple. Mark

I bought the boat with 0% VAT. There's nothing in the contract to say that VAT liabilities are transferred to me the buyer, and the boat builder is confident that VAT will not be demanded by HMRC. ark

I think we can say that the terms VAT and luxury should not be associated. My mistake. Sorry.

My interpretation (which is clearly wrong) of what HMRC consider as non-luxury items was:- If you don't have the item for a significant amount of time, you will stop breathing (e.g. food, shelter, healthcare), but here's a list of non-luxury (0% VAT) items (in HMRC's point of view) :- Antiques, works of art or similar, when sold to public institutions Burial or cremation (human) Commercial land & buildings (selling/leasing/letting) Cultural events operated by public bodies (museums, art exhibitions, zoos & performances) Education, vocational training Financial services (money transactions, loans/credits, savings/deposits, shares/bonds) Funeral plan insurance Gambling (betting, gaming, bingo, lottery) Health services (doctors, dentists, opticians, pharmacists & other health professionals) Insurance Medical treatment & care Membership subscriptions Postage stamps Sports activities & physical education TV licence A couple of these items make sense but most of them are just outright bonkers, ludicrous, bizarre!

Thank you for your comments guys. My boat is zero VAT rated. HMRC have a formula that gives you a gross weight figure. It doesn't make sense to me but who am I to question HMRC. The result of the calculation needs to be greater than 15 tons for HMRC to class the vessel as a ship. The boat builder is the one who is responsible to HMRC for VAT charges. The disaster stories on the internet are about those contracts where the boat builder put in a clause that made the buyer responsible if HMRC questions it. These stories have made the buyers more careful and made the boat builders more responsible - I don't believe any boat builders are attempting to put that clause in these days. My boat builder (as is the case with many) fully understand the rules defined by HMRC. My boat builder has been to court twice to fight HMRC (I wouldn't fancy my chance in that kind of battle) and on both occasions they won. So they understand the details of the law and of HMRC's attitude to it. VAT is supposed to be for luxury items (remember the debate about Jaffa cakes being biscuits or cakes). This means that live-aboards should be exempt from VAT (all of them). HMRC are bending/breaking the rules when they apply VAT to live-aboards but their argument is that smaller vessels are easier to convert into pleasure vessels (thus qualifying for VAT). It's a weak argument but they are difficult to fight. HMRC have recently introduced a change to their rules on zero rated live-aboards and that is the 9' beam or less does not achieve VAT exemption. My boat builder intended to challenge this and go for a third court case victory but the barrister costs were so high that the boat builder just had to let it go. My original question was answered by myself. I found a clause on the HMRC website that said zero rated equipment, materials and services could qualify for zero VAT but only if they were a part of the same contract as the boat build. So unfortunately for me, all my additional purchase for my sailaway fit-out needs to be purchased through my boat builder. Following up on someone else's comment....... You can reclaim VAT when you're not VAT registered. If you live on land and want to buy some renewable energy components for your house, they are 5% VAT rated. You buy your solar PV, heat pump or whatever at 20% VAT then you contact HMRC and show them your receipts. They reimburse you with 15%. One of my customers is doing this as we speak. Personal Update My blog is now quite old (5 years I believe) and much of my intentions and many of my views have changed as I have learned more about the boating world. I will resume writing on the blog very soon because my fit-out will start in the next few weeks. I have been planning to buy a boat from Colecraft for 6 years. Last week, after having a build slot booked for 12 months and them having a significant deposit for 6 months and days away from steel cutting, they told me that they didn't want to build a boat for me, they don't have the time, and I should take my deposit back. I understand why they did this - they are traditionalists and I am a long way from that, so to them I am a 'difficult customer'. It did shatter my dreams though. Next day I picked up the pieces and bought myself a new, already built, sailaway by Collingwood. I had to make a few compromises and I'll be doing alterations for months to come but it will get me on the water sooner. Mark

I think I've found the answer. This paragraph is in notice 744 4.3 What’s treated as part of a supply of a ship or aircraft Normal fixed and loose equipment and furnishings necessary for the operation, navigation or safety, are treated as part of the supply of a ship or aircraft if supplied with it under the same contract. An initial normal complement of on-board spares is treated in the same way. If I try claim back VAT on my own purchases, if won't be the 'same contract', so I must go through my boat builder. Mark

My boat does qualify for zero VAT. My question is whether I can purchase fit-out materials myself and claim the VAT back myself, or must I go through the boat builder. Regards, Mark

I'm not sure this topic is in the right place but I'll move it if not. I've just purchased a new sailaway liveaboard boat. It is zero rated for VAT. I am now constructing a list of items that I can ask my boat builder to buy and include in the sale. If I do this, I can get theses items also zero rated for VAT (if they qualify, i.e. no white goods). This shopping list is getting very long and I'm expecting my boat builder to eventually say 'no' to some or all of it. Does anyone have any experience of dealing with HMRC on the topic of VAT zero rating for liveaboards? Would it be possible for me to purchase these items and then claim the VAT back from HMRC myself? Mark

Burning wood certainly isn't a perfect environmental fuel, but none are, and the discussion is about comparing it with diesel. It does beat diesel from an environmental POV. The fact of the matter is that once a tree has grown, the carbon within it is destined to end up in the atmosphere by one way or another, so it may as well be used to displace fossil fuel in your boat. Picking up dead branches from the canal side has got to be an environmentally better fuel than diesel.

What 'tripe' are you referring to? Or was that just a general insult?

Fossil fuels have been deposited by photosynthesising plants over hundreds of millions of years. We're digging these stores up and burning them in a few decades. That's bad. Wood starts it's life by by growing through the absorption of CO2. When you burn it, you only giving off what the wood has recently absorbed. This is carbon neutral, and is many orders of magnitude better than releasing fossil fuel carbon.

Running a diesel engine to charge your batteries is not a great thing, but it's no worse than using diesel for propulsion. The advantage of an electric drive is that it gives the possibility of getting free electricity from solar pv, and of course you can also charge them from land electricity, which is what the Dutch do.

That's another form of solar power isn't it?

I think it is not a balanced case to rule out one technology because of its manufacturing cost. If you want to do that and be fair, you need to do it for everything (which we probably should do). Everything from cement to steel to diesel engines to TVs has an environmental cost. Your average smartphone contains a dozen rare elements and we're close to running out of most of them. It may be a case of 'burying one's head in the sand' over manufacturing but to be able to travel the UK canal network using no fossil fuels has got to be considered a good thing. I can do that with my boat. I just need the diesel engine to get me upstream on a river. The electric drive isn't capable of that. Mark

Yes, I agree. So it appears that I won't qualify which is a shame when I'll have over 5.5kW of solar PV and will do 90% of my travelling on the electric motor.

I've been told (I think at this years Crick show) that you can qualify for a discount on your CRT license if your boat has a permanently installed electric drive. Is this true, and do hybrid drive systems qualify too? My boat (yet to be built) will have a standard diesel drive plus a 10kW motor driving a pulley wheel on my prop shaft. This gives me electric drive, diesel drive, or both together. Does this qualify for any license discounts? Regards, Mark

Apologies folks for not being complete in my questions. I had assumed that the rules would be the same across all rivers in the UK, but if they are different, it would be good to hear about the differences. As for my specific circumstances, I had originally plan on using the Thames and the grand union, but I've sort of relocated now (the blog is out of date) and now plan to use the Trent and Erewash and possibly the Soar. Now, can someone tell me what the definition of mooring is on a canal. Let's say the boat is stationary and out of the way, but is not tied to the bank, am I still moored? Mark

Hi Folks, Can anyone tell me what the definition of 'mooring' is please. I've been reading around permanent and short-term mooring, and have realised that there are time limits on canals and charges on rivers. I'd like to understand the details of what can and can't be done. For example, if I find a quiet location on a wide river and I drop an anchor so that I am out of the way of traffic but still some way from the bank, am I moored? Would I need to pay the nightly mooring charge? Regards, Mark

Hi Everyone, Thought I better give you an update. Firstly thanks to Alan for giving me precisely what I was asking for. It took a good few hours to begin to understand what the RCD2 was telling me. There were sentences in there that frequently referred to many other documents and subsections, so the reading didn't flow. And thank you to the others that gave constructive comments - I particularly liked the outboard idea. The blog is very 'out of date'. I'll start writing on it again once the design is complete. I think it is perfectly acceptable for a boat builder to say 'I don't know', when asked if an unknown engine from China meets all he EU legal regulations. All a boat builder needs to know is that an engine he is buying is conformant to current legislation. All he needs to hear is 'yes' from the engine supplier. I'm not sure how I will end up using the boat. It will certainly be my home and I am most likely to be tied to a location due to work, so the amount of travelling is expected to be low. This is why I chose the generator strategy - I didn't want to be firing-up a 3L engine regularly to give me a few kWhrs of electricity..........unless I.......[read on] The original idea was to have:- the entire roof area covered with solar PV; a huge bank of LiFePO batteries (30kWhrs); a fully heat recovered 10kW DC generator (CHP); and a huge electric motor to propeller the boat. I've spent a lot of time researching into the requisite technologies and sourcing components, and soon realised that the battery bank needs a Battery Management System (expensive and potentially unreliable), the motor needs a very heavy duty controller, the generator needs a sophisticated controller to allow it to provide power to the motor but not so much that it becomes over-loaded. I've then got to make sure that the solar PV MPPT charger fitted in with all that. Also, due to the power requirements of the motor, I would need the battery bank nominal voltage to be 96v, which means the inverter (to get it to 240VAC) would be quite rare and therefore expensive. And then there's still a lack of 12VDC supply and a bow thruster would have to be AC driven. All these extra components are what bust my budget and not to mention added huge complexity. At the same time, the guy who is designing my propeller said that the best the motor could do for me and my boat is 4knotts. The motor is rated at 20kW but can push up to 50kW for short periods. That sounds adequate to me but electric motors have very different characteristics to IC engines - beyond a certain speed the torque starts to drop off so 4knotts is the best I could expect. I've now decided to dump all this stuff and go for the traditional approach. I did go via a few commercially available existing hybrid marine systems but the price got in the way again. My current plan is to separate travel power from living power. I'll have lots of solar panels for power and a multi-fuel stove with back boiler for heat. That should suffice in the brighter months but if I do need to run the engine for power, I'll keep the running time to a minimum by using a 190Amp alternator regulated at 28.4v (with a 24v battery bank). The alternator is water-cooled and I'll recover exhaust and coolant heat too so I'm not gonna be short there. It's been a long and sometimes frustrating journey, but I can't say I haven't enjoyed it. I'm that kinda bloke. Now, while I'm making fundamental decisions about my boat, does anybody have any opinions on toilet technologies?

I think I need to explain a little more to steer the speculation. My long term goal is to have an electric drive with a diesel generator, but the cost of the batteries alone stops me from making this project float (pun intended). I am planning to spend the first year on the water fitting the boat out whilst pinning down a full time job, so I'm expecting to not move the boat much (permanent mooring), so this is why I'm looking for a lower cost engine solution. I have 12 years experience of importing Chinese engines. My day job is buying Chinese diesel generators and converting them to run on biogas. There are some very good engines made in China (MAN, Deutz, Cummins, and even some kubota and Yanmar copies that making their way into UK narrow boat - I saw them at Crick). There are some bad engines made there too, but I know which ones they are through painful experience. So I still haven't managed to find the emissions regulations and who and when they get checked. I'll have another search this evening. Mark

Hi Folks, I'm having a new boat built in the new year. I'm currently spec-ing it out. I've very quickly bust my budget so I'm looking at ways of reducing cost. I don't intend to move the boat much (if at all), so the performance of the engine is not important. I can get old second hand or even a chinese engine, but what regulations do I need to conform to (wrt emissions)? Who does the checks and when? My boat builder doesn't have the answers. Mark

I'm starting to investigate mooring options. I won't need it for a good six months so I've plenty of time. I started at the CRT website and due to the location of my work and the width of my boat (widebeam) I've decided to situate the boat around the Trent, Erewash and Soar area. I like the idea of cruising around but I need access to my car so that's not gonna be easy. I also need to fit out the boat so keeping it in one place would be best for that. So I started to look at residential moorings and came across a document by the CRT that was reviewing prices. Useful info but here comes the naivety - they didn't put units on the prices. I saw a range of prices from £85 to £120, but is this:- per boat per year - that would be nice but I'm guessing that's not the right unit per boat per month - £1,020 to £1,440 - still nice but highly unlikely in my opinion per ft length per year (my boat will be 65' long) - £5,520 to £7,800 (£650 per month), Ouch!!!!!!! Also, there was no explanation of any higher costs being imposed on widebeam boats. Are the mooring charges the same as narrowboats? Any help would be greatly appreciated. Mark

Yes, good point. But there are a few ways to spin this. A lender may think that you will certainly add value to a new sailaway because that's what you must do if you're going to live in one, but with a second hand boat there's no guarantee you're going to improve it.

Isn't it also easier to get a loan for a new boat than it is to get a loan for a second hand boat?