VAT on used boats?
Discussion
There's no vat on normal used boats. If its listed as +vat it will basically mean that the original vat was never paid, the usual reasons are it was bought through the owners business as for 'client entertainment' or that it was sent abroad when new to somewhere outside of a vat charging country. If bought now the vat will be charged at 20% of the used sale price and not the new price.
Eric Mc said:
The normal VAT rule is that private sales between individuals are VAT free (Outside the Scope of VAT is the technical term).
However, if the entity selling the item reclaimed Input VAT when they originally purchased the item, then they must charge VAT when they sell it on later.
Thanks all for the replies, even a yacht broker which is impressive!. Its a broker which I think means they do not own the boat, it is still owned by the seller. That's why I thought the 'inc VAT' bit was an error, or added to look impressive, when it was in fact irrelevant. A boat's price does not suddenly go up 20% at a broker. Or maybe it was a p/ex in which case the broker might own it after all and might have to add VAT - but that would wreck their margin...However, if the entity selling the item reclaimed Input VAT when they originally purchased the item, then they must charge VAT when they sell it on later.
Eric Mc said:
If you are acting as an agent - and selling something on behalf of somebody else, your income is your "Commision" or "Handling Fee".
If you are a VAT registered agent, then you will only charge VAT on that "Commission/Handling Fee".
That makes sense, thanks Eric. But the seller not the buyer pays that VAT so the advert - pitched at buyers - still seems odd.If you are a VAT registered agent, then you will only charge VAT on that "Commission/Handling Fee".
To be strictly correct, the broker should really state 'VAT paid' rather than 'inc VAT' although it comes to a similar end in that within the price of the boat, any existing VAT liability is included.
Loads of entertaining exceptions to the rule out there (such as what happens when a VAT paid boat sells between two private individuals outside of the EU fiscal zone waters), hence why the plug towards HMRC Notice 8 is relevant. Any other words on here are simply individual interpretations of what is written there.
Loads of entertaining exceptions to the rule out there (such as what happens when a VAT paid boat sells between two private individuals outside of the EU fiscal zone waters), hence why the plug towards HMRC Notice 8 is relevant. Any other words on here are simply individual interpretations of what is written there.
Yacht Broker said:
To be strictly correct, the broker should really state 'VAT paid' rather than 'inc VAT' although it comes to a similar end in that within the price of the boat, any existing VAT liability is included.
Loads of entertaining exceptions to the rule out there (such as what happens when a VAT paid boat sells between two private individuals outside of the EU fiscal zone waters), hence why the plug towards HMRC Notice 8 is relevant. Any other words on here are simply individual interpretations of what is written there.
Thanks YB, I think the broker added 'inc VAT' to make it look more appealing, when in fact it means 'no VAT'.Loads of entertaining exceptions to the rule out there (such as what happens when a VAT paid boat sells between two private individuals outside of the EU fiscal zone waters), hence why the plug towards HMRC Notice 8 is relevant. Any other words on here are simply individual interpretations of what is written there.
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