Existing concession conflicts with EU law
HM Revenue & Customs (HMRC) has announced that a VAT concession on sailing boats will end from January 2012 because it conflicts with EU law.
Currently VAT-registered businesses can zero rate the supply of a yacht to a UK resident as long as the owner intends to keep it outside the EC, but this loophole will close.
Businesses will be able to continue zero rating the supply of boats to UK residents only if they either export the boat themselves or make all the arrangements for the export.
John Bryning, policy advisor, said: ‘We recognise that boat manufacturers may have to make adjustments and will offer a 12-months period of notice before the concessionary treatment formally comes to an end.’