Dive Clubs; Reclaiming VAT on fuel

[Simon B]

I'd begun to wonder about the safety boat cover thing for sailing clubs. Yes they need the safety cover but it is an implicit cost of the sport. If I get time I will see if I can find a source of tax knowledge.

[andyace]

The Adjudicator's Office only deals with complaints (we havent got that far yet)

I called the vat advice line they wanted me to supply my company name or vat number i said i didnt have one as this was a general enquiry, he asked for my address i gave him the post code and number, he said that there is a company registered at that address, i said i know but this is an enquiry not connected with the company he asked our vat number i said again this was a general enquiry regarding vat on fuel for a amateur dive club boat. HE PUT THE PHONE DOWN ON ME...............................

I called back spoke to a woman who said after me explaining in great detail about my enquiry dive boat diveclub vat fuel etc she said "was the van used solely for business use?" AGGGGGHHHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!.
I re-itterated what the enquiry was and she finally grasped the concept she had to refer it to the technical team put me on hold,
30 seconds later she came back and said yep no problem as long as you record the mileage etc. guessing that she was assuming we were a diving business not a club, i said "are you sure? this isnt a professional business this is an amateur club and the boat is owned by the club, but the members pay to use it do dive socially at weekends" she has gone away for another check with the technical team and will call back in the morning.

I feel that it is a grey area open to interpretaion the guidlines seem fairly clear but you can interpret it any way you like.
But tomorrow if I can get confirmation in writing tomorrow I will post it here for all and sundry.

[Simon B]

So fora members its pens poised or conciliatory beers ready we're hoping for the former! poor old taxman, awash with the last three years of fuel bills from every club that kept its reciepts.

[quinquarimarine]

[QUOTE=andyace] The vat advice centre said
It is perfectly ok for an amateur dive club to reclaim all vat and excise on all fuel used in the pursuit of diving.
So get your EX50 or HO50 forms and get claiming..........

The final definition will be for pleasure or commercial purposes. If the diving is for pleasure and HMC&E agree with the rebate then anyone with a pleasure boat can claim.

If you claim it is commercial then you need to look towards coding the vessel and thus forming the dive club as a business. For this you will all need to hire the boat from the business and the inland revenue will also look at the issue of personal use.

I suggest that a careful look or discussion is made with the MCA on the definition of commercial/pleasure as the issues of club use have been well looked at.

HMC&E normally look at a VAT reg no. for the claim. Otherwise there is the definition as to whether it is a bonafide commercial vessel and under VAT rules this was considered as a vessel licenced for the conveyance of 12 pax or more. It has been suggested that this may be relaxed to 10 pax or more but I have no confirmation of this.

I was the one many years ago that pushed and suceeded in the duty claim for small passenger vessels when it only applied to fishing vessels. I have many times warned against abuse of the system and at the end of the day it is for commercial users to compete equaly against those using red d.

So if the club wants to form a proper business with the true intention to trade, make a profit and thus declare all charges to members, and declare wreck and other gains then no problem in my mind. However if it is a dodge that may damage the genuine commercial sector then please do not expect any sympathy.

Do remember my first point "If the diving is for pleasure and HMC&E agree with the rebate then anyone with a pleasure boat can claim."... That means all and sundry ?

Of course if proven otherwise I will humbly bow !

Cheers

John
www.quinquari.co.uk

[thorper]

Has anyone got a written answer back yet?

It sounds like everyone else talked to idiots at C&E. I talked to someone who understood, however was not an expert, so got the technical team to call me back. As stated earlier, we had a discussion, and the end result was club diving is for pleasure use (lets face it - it is true). As the guidelines are 100% clear on pleasure boats are not exempt, we have to pay.

I think the 'confusion' is that people at C&E get do not understand when you start talking dive clubs and ribs, as most people have no idea what they are. However this does NOT mean that they have no idea about pleasure boat use and exemption.

People are right to challenge it, but don't expect a result here. If you are going to try it on, get a written notice for your specific circumstances... if you try it on and get caught, you will get fined or prosecuted, which is not in any clubs interest.

Ricky

ps - coding your boat and running it as a business would probably work (but would be time consuming). I know of a hardboat down in Eastbourne where the skipper and his mates clubbed together and bought an offshore 105 for diving. They started a business, coded the boat and do day charters to cover costs, but it is really so they can go diving themselves.

[andyace]

Quote

coding your boat and running it as a business would probably work (but would be time consuming). I know of a hardboat down in Eastbourne where the skipper and his mates clubbed together and bought an offshore 105 for diving. They started a business, coded the boat and do day charters to cover costs, but it is really so they can go diving themselves.

To reclaim vat you need to be VAT registered
All clubs should keep financial records
To code a boat is £36 a metre,
A qualified skipper is in the clubs interest and promotes safety.
Divers pay to dive.

you are practically a business anyway.

QED.....................

[quinquarimarine]

Originally Posted by andyace

Quot

To reclaim vat you need to be VAT registered
you are practically a business anyway.

QED.....................

To be VAT reg you either need to show sales in excess of the threshold ( approx £58k) or if below you will need to convince HMC&E that you are trading with intent to make a profit. Being "practically in business" is not the same as being in business.

A business is defined in loose terms as the intention to make a profit and on that profit dont forget that taxes are due.

If it were so easy a normal employee could set up his own business as driving himself to work and claim the VAT and all costs back arguing that he hoped to make a profit on his "business" . Having a days fun diving is the same principle.

My hobby is not boats, its clay and game shooting. So should I set up a "business" to provide me with my hobby and will I get away with it.??

Indeed I resent the game keeper who gets a "free" days shooting when I spend a lot out of my after tax income. So those who pleasure boat resent the fuel duty when, I in my business I have cheap fuel for my commercial vessels. Please tell me what the difference is ?

Some thoughts though for those who wish to pursue the point.

1. Customs define the rebate as only for commercial users only. So ask "is the rebate due for commercial road users". The answer will be no and I guess an explanation that it is a road fuel duty. This is your cue as if they define it as a road fuel duty then it should not apply to non road use ??ie. why does it apply to marine.
2. Look at the club as a charitable status and from that enquire if the RNLI gain duty reabtes.

Cheers

John
www.quinquari.co.uk

[Simon B]

Cheers Quiquarrimarine,

You are giving me hope! As you know my interest is to maintain our dive clubs capability to run its boats. We are not interested in profit and will be registering as a CASC this year. This effectively assumes you plough all funds and donations back into your club.

[Simon B]

Just to keep this one going, we are now registered as a CASC and I have sent a written enquiry to HMCE as regards the points set out in Quinquarimarine's last post. I'll let you all know how we get on.

If any other fora mmbers have info on this old post please post.