The question of VAT on narrowboat sales was raised in another thread. I thought that it warranted a thread of its own, so here it is…

Forum member Ainslo asked;

“I also wondered why some advertised boats state ‘tax paid’? do we get charged VAT on 2nd hand boats? If so are the prices we read inclusive?”

The “tax paid” stated in some adverts is just an advertising gimmick. If a company selling a narrowboat directly (i.e. the narrowboat builder) is registered for VAT then the boat has to have VAT added to it. The price they quote however will be inclusive of VAT. So, if the narrowboat is for sale for £100,000 the cost of the boat is £83,333.33 + 20% VAT (£16,666.67) = £100,000. If the boat is built as a liveaboard, under certain circumstances the VAT can be reclaimed by the buyer but I understand that the rules are very complicated.

If the narrowboat is being sold through a brokerage, you don’t pay VAT. There is some VAT involved but only for the seller and only on the brokerage fee.

If the boat is purchased from an individual who isn’t VAT registered, you don’t pay VAT.