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Readers’ forum: Canal boat

07 December 2021
Issue: 4820 / Categories: Forum & Feedback
Tax position on renting out a canal boat.

I have just taken on a new client who is in the process of buying a canal boat for about £38 000. The boat will be rented for canal holidays. These will be managed by a canal boat company that will rent the boat out themselves sending the owner 30% of gross receipts. HMRC’s Capital Allowance Manual (CA25100) defines a ship as any vessel that is capable of being manoeuvred under direct or indirect power so the question of claiming capital allowances arises.

I have also looked at the position over VAT as she could presumably register for VAT reclaiming the VAT on the barge? I have not checked but I suspect that the boat company will have a self-billing arrangement in place. Canal boats are currently holding their value and may well rise given the current economic situation. I have explained that there may be...

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