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UK To Phase Out VAT Concession On Boats

by Jason Gorringe, Tax-News.com, London

16 December 2010


The UK tax authority, HM Revenue and Customs (HMRC) has announced that it is to abolish a VAT concession on sailing boats from January 2012 following a ruling that it conflicts with EU law.

From January 1, 2012, HMRC has announced that VAT-registered businesses will no longer be able to zero rate the supply of a sailaway boat to a UK resident who intends to keep it outside of the Euro zone.

Businesses will however continue to be able to zero rate the supply of a boat to a UK resident provided they either undertake to export the boat themselves or make all the arrangements for the export.

HMRC said that following a recent legal decision it is reviewing its concessions, the majority of which are planned to be retained, but a minority, after a period of notice, will be rescinded, as they have been deemed to conflict with EU law.

John Bryning, HMRC’s Policy Advisor, said:

“We recognise that boat manufacturers may have to make adjustments. [HMRC is offering] a 12 months period of notice before the concessionary treatment formally comes to an end.”

TAGS: individuals | tax | investment | business | marine | value added tax (VAT) | fiscal policy | law | United Kingdom | tax planning | HM Revenue and Customs (HMRC) | HM Revenue and Customs (HMRC)

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