Vintro Pro
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Vintro Pro
NL · FR · EN
Boats are named outright. And still this is the type where a second rule spoils it most often.
Second-hand boats fall under the margin scheme.
Second-hand means of transport fall under the margin scheme, boats included. Watch the European new-means-of-transport rule: a used vessel can fall under it too.
In the UK a used boat is second-hand goods under article 2 of the Value Added Tax (Special Provisions) Order 1995, and gov.uk confirms you can use a margin scheme for second-hand boats and houseboats that do not meet the criteria for zero rating (Selling houseboats and caravans if you use a VAT margin scheme). But article 13(2) shuts boats and outboard motors out of global accounting. Belgium’s FPS Finance names boats among second-hand means of transport.
What makes this type awkward is that boats are sold across borders more often than average. And on sales into the EU a second rule joins in that can push the margin scheme aside.
A vessel bought from a private individual, checked over and resold is second-hand goods usable again after repair. New sails, a serviced engine or a repainted hull change nothing.
Buy from a dealer with VAT on the invoice and it is an ordinary purchase with deduction. That choice is made at purchase.
Article 2 of the Value Added Tax (Special Provisions) Order 1995 defines second-hand goods as “tangible movable property that is suitable for further use as it is or after repair, other than motor cars, works of art, collectors’ items or antiques and other than precious metals and precious stones”. Article 12(2) opens the margin scheme to “works of art, antiques and collectors’ items” and “second-hand goods”.
That is the whole test, and it is a test about the goods, not about your trade. The power to charge VAT on the profit margin sits in section 50A of the VAT Act 1994, which also names motor vehicles separately. Article 12(3) of the 1995 Order adds the purchase side: you must have taken possession of the goods on a supply on which no VAT was chargeable, or on another margin-scheme sale. gov.uk (VAT margin schemes) puts it plainly: you cannot use a margin scheme for “any item you bought for which you were charged VAT”. Belgium, which follows the EU VAT Directive, keeps its own exclusion list: FPS Finance names new goods, precious metals, precious stones and pearls, renovated goods, goods consumed on first use and goods that cannot be used again in the same state, under article 58, § 4 of the Belgian VAT Code and Royal Decree no. 53 of 23 December 1994. The four-country panel below shows where that changes the answer.
The example is a second-hand sailing boat: bought for €11,000.00, sold for €15,500.00. Put your own figures in.
Sold at a loss: no margin on this item, so no VAT. In the UK you work item by item: the loss counts as zero and gives you nothing back.
The VAT is inside the margin, not on top of it. That is the mistake this calculator is built to prevent: 20% on this example’s margin of 4,500 is 900.00, while in the UK you owe one-sixth, 750.00 — the 16.67% gov.uk quotes. At Belgium’s 21%, the same mistake turns €780.99 into €945.00. How to do this across a whole return period — and why France calculates piece by piece by law — is set out in How do you calculate margin VAT?
In the UK each boat needs its own margin and stockbook entry, since global accounting is closed to boats and outboard motors (article 13(2) of the 1995 Order; VATMARG03100). On a supply into an EU member state the new-means-of-transport rule joins in. A vessel longer than 7.5 metres counts as new if it is supplied within three months of first entry into service, or has sailed for no more than 100 hours (EU VAT Directive 2006/112/EC, article 2(2)). That is not a detail: such a supply is exempt in the member state where the transport starts, and VAT is due in the buyer’s member state (Directive 2006/112/EC, articles 138(2)(a) and 2(1)(b)(ii)).
Beyond that, the refit stays out of the UK margin: gov.uk says repairs, parts and accessories cannot be included in the calculation. Belgium excludes goods out of use and goods converted so heavily that they are a different vessel at the point of sale.
In the UK, whether boats fall under the scheme is a matter of UK law: HMRC runs its own margin schemes under section 50A of the VAT Act 1994. Belgium, the Netherlands and France all follow the same EU VAT Directive (2006/112/EC). Each country interprets the rules itself; where that makes a difference for boats, this page says so. The rate and the calculation method always differ.
Margin across the whole return period. Article 58, § 4 VAT Code and RD no. 53.
Per period by default (global accounting, Uitvoeringsbesluit OB 1968, art. 4c(1)). You can opt out in writing to the inspector, for at least five years.
Legally piece by piece, but globalisation per period is allowed, with no prior election. CGI art. 297 A; BOFiP § 260.
HMRC’s own scheme, outside the EU. Below the registration threshold you pay nothing.
A vessel over 7.5 metres is new within three months of first entry into service or up to 100 hours under way, and on a supply to another member state it is then exempt in the seller’s member state and taxed in the buyer’s (Directive 2006/112/EC, article 138(2)(a)).
The margin is selling price minus purchase price. With boats the refit often costs more than the vessel, but it does not lower your margin.
If your supplier charged you VAT, the vessel is not margin goods, whether or not you deducted it.
A margin invoice carries no VAT amount. At these amounts that is an expensive mistake.
This is an explanation, not tax advice. Whether the margin scheme is the right choice in your case, and how to enter it in your return, is a question for your accountant.
Yes. In the UK a used boat is second-hand goods under article 2 of the Value Added Tax (Special Provisions) Order 1995, and gov.uk confirms the margin scheme for second-hand boats and houseboats that do not meet the criteria for zero rating. Boats cannot go under global accounting (article 13(2)). Belgium's FPS Finance names boats among second-hand means of transport.
The EU new-means-of-transport rule joins in: a vessel longer than 7.5 metres is new if it is supplied within three months of first entry into service or has sailed for no more than 100 hours (Directive 2006/112/EC, article 2(2)). Such a supply is exempt in the member state where the transport starts, and VAT is due in the buyer’s member state (Directive 2006/112/EC, articles 138(2)(a) and 2(1)(b)(ii)). Check it before you invoice.
No. gov.uk says you cannot include repairs, parts or accessories in your margin calculation; you reclaim the VAT on them in the normal way. Labour, materials and mooring sit outside the margin.
In the UK, at 20%, the VAT is one-sixth of the margin: €4,500 ÷ 6 = €750.00 (in pounds the sum works the same way). In Belgium, at 21%, €780.99 (€4,500 × 21/121).
The same question, a different kind of piece. The answer differs more often than you would expect.
Every piece gets its own purchase price, selling price and scheme. Vintro Pro keeps margin goods separate from the rest and works out your margin per return period.
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