VAT relief for (some) liveaboards
I’ve had a couple of customers over the past few years who’ve converted an elderly ex-commercial vessel to be their new liveaboard home, and not had to pay VAT on some of their purchases.
VAT Notice 744C – Ships, aircraft and associated services is the document you need to read to see if you may be eligible. I’m not a lawyer or VAT expert, so do your own research, and if necessary and worthwhile, consult an expert.
What is a ‘ship’?
In a nutshell, HMRC defines a ‘ship’ in section 2.2, these may be –
- submarines
- hovercraft
- light vessels
- fire floats
- dredgers
- barges
- lighters
- mobile floating docks or cranes
- off-shore oil or gas installations, used in the underwater exploration or exploitation of oil and gas resources which are designed to be moved from place to place.
So, if you intend to convert your submarine for ‘liveaboard’ use and go cruise the North Sea and Baltic, then you may be eligible for a discount.
However, the following are excluded, although they’re not really relevant to most of us –
- fixed oil and gas installations (even though they might be transported to a site as a floating structure)
- vessels which are permanently moored (for example as attractions) and not readily capable of navigation
What is a ‘qualifying’ ship?
If your ‘ship’ meets HMRCs’ interpretation, you then need to check if it’s a ‘qualifying ship‘.
Section 2.3 defines a qualifying ship –
“A ‘qualifying ship’ is legally defined as any ship that has a gross tonnage of not less than 15 tons and is not designed or adapted for use for recreation or pleasure.”
So, provided it is or was classed as a ship and it weighs 15 tons or more and you don’t intend to have parties or enjoy yourself while aboard, then you meet the VAT free criteria I think.
As I said, I’m not a lawyer or VAT expert, so seek proper legal advice if appropriate and worthwhile.
If you’re happy you meet the criteria, then you’ll need to complete and return a couple of documents before placing your order.
We’ll need a ‘certification of tonnage’, if you don’t already have one, then have a look through the British Marine Boatbuilders link for someone local who can provide the necessary.
You’ll also need to complete and sign a ‘VAT Declaration of Use’, a standard copy of which you can download here.
Congratulations and remember 2.3, no recreation or pleasure!
