HMRC clamps down on yacht chartering businesses
For many years, HMRC have been unhappy that certain yacht owners have been able to reclaim VAT on the purchase of a yacht and associated running costs, by setting up a yacht chartering business. HMRC’s view has been that in some cases, (principally where there is a significant level of private use by the owner and/or their family), this situation has given rise to a tax advantage.
HMRC recently issued a business brief outlining their new approach to yacht chartering/leasing businesses. This approach appears to be much tougher than the position taken until now and adopts the principles of a recent 'abuse' case (Halifax and Part Service Srl).
The new rules focus on the economic substance of the business and if a tax advantage is the aim of the arrangement, then HMRC will take appropriate action.
It appears that this new approach will apply to both existing businesses and to new applications for VAT registration.
Jane Stacey is a VATadviser and a Senior Manager at Mercer & Hole. The views given in this blog are personal to the author.
Date: 30th September, 2009
Articles from this Author
20th July, 2010
Potential good news for Charities - VAT
22nd June, 2010
Emergency Budget 2010 - VAT
18th June, 2010
Holiday homes - VAT refund scheme for DIY housebuilders
15th June, 2010
Charity Advertising - ‘Pay-Per-Click’ services (PPC)
Contact Business Service Partners
Choose from the drop down menu below to select a Partner to contact.
“Good luck to everyone who has also made it as a finalist, I look forward to awards evening later on in the year”-L… twitter.com/i/web/status/8…
For the latest Mercer & Hole news, visit our LinkedIn page mercer-&-hole