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VAT on a boat that has never earned income.
Our client bought a secondhand boat in January 2014 for £250 000. It can sleep ten passengers and is licensed to carry 12. It was purchased with a view to charter and therefore any supplies would have been zero rated. The client has been VAT-registered as a sole trader since October 2013. There have been no sales since then but the boat has had a number of repairs and improvements on which input tax has been claimed. Our client is now looking to sell the boat. He has told us that no VAT is chargeable on any sale because no VAT was charged or claimed on his original purchase. The original buyer would have claimed the VAT when it was new he says. Is this correct?
We are also seeking to deregister the client from VAT before the sale goes through (the boat has been for sale all...
