VAT when importing a houseboat to the UK

The question of VAT in UK on houseboats is a nuanced one, and the answer is far from simple. In the UK, recreational powered vessels generally incur a standard 20% VAT, making a EUR 70,000 boat potentially cost EUR 84,000, unless you’re a VAT-reclaiming business.

But why do our boats seem exempt from this VAT load?

The catch is, they do attract VAT in United Kingdom but at a zero rate, sparing you from additional costs. HMRC defines a houseboat, for VAT purposes, as a floating decked structure designed solely for permanent habitation without means for self-propulsion (floating house). Essentially, if it can’t easily become self-powered, it qualifies as a houseboat, even if not used as a permanent residence.

0 vat costs when importing a houseboat to the UK

This zero rate extends to the boat’s fitout, as long as furniture is added during the manufacturing process. Residential moorings also enjoy VAT-free status, though council tax (usually Band A) is applicable.

What about VAT rate while renting a houseboat in United Kingdom?

When it comes to letting your barge house, off-season rentals (e.g., November to April) are zero-rated for VAT. However, if your turnover exceeds £85,000 from holiday lets or short-term rentals, you must charge the standard 20% VAT rate.

If you opt for a power unit and front driving position, be aware that VAT would then be charged at the standard 20% rate. As you navigate houseboat VAT waters, understanding these intricacies can significantly impact your financial considerations.