Commentary

BB/35D/04 VAT—clarification of the VAT liability of ships supplied to customers who intend to use them as residential accommodation

Part V16 Forms and other HMRC material

BB/35D/04 VAT—clarification of the VAT liability of ships supplied to customers who intend to use them as residential accommodation

BB/35D/04 VAT—clarification of the VAT liability of ships supplied to customers who intend to use them as residential accommodation

Business Brief, Issue 35. 31 December 2004

This Business Brief article clarifies Customs' policy on the application of the zero rates for ships and houseboats. Those involved in the supply, repair and maintenance of ships, and their customers, should read this Business Brief article.

Background

“Qualifying ships” – are zero-rated for VAT purposes. A “qualifying ship” is defined as a ship which is over 15 gross tons and is neither designed nor adapted for use for recreation or pleasure. Such ships usually have clear features of a commercial design, such as a hold specifically designed for carrying cargo, commercial fishing equipment or the ability to carry or entertain large numbers of paying passengers. Recreational activities could include pleasure sailing or cruising on inland waterways. A ship that is

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