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HMRC internal manual

VAT Sailaway Boat Scheme

Assurance procedures: issuing assessments

Provided the supplier and the entitled customer follow the procedures in VAT Notice 703/2, operation of the Sailaway Boat Scheme should be straightforward. Assessments can be raised in the circumstances detailed below. In cases of doubt or difficulty, contact the policy team - VSWB1080 explains how to do this.

Inadequate export evidence

Where there is no satisfactory evidence of export and tax has not been accounted for, an assessment should be issued for the period in which the supplier received the payment for the vessel. The assessment should be calculated by applying the VAT fraction to the consideration received.

Out of time forms

Vessels must be exported within the time limit detailed at VSWB2020. Where a supplier holds evidence of export but the date of export is outside the permitted time limits the supply must not be zero-rated. This applies even if the export documentation has been certified, unless a customs officer has specifically authorised the delay on the form. If such supplies have been incorrectly zero-rated an assessment should be issued.

Commercial supplies

Where the trader has knowingly used the Sailaway Boat Scheme for commercial supplies (eg invoices and export documentation showing a business name as the buyer may be one indication) then zero-rating should be disallowed unless the conditions in Notice 703 Exports of goods from the United Kingdom are met. If the trader cannot meet these conditions then VAT is due at 1/6th of the consideration received for the boat. There is a link to Notice 703 at VSWB1020.

The table at VSWB4050 describes an alternative course of action where suppliers are unaware of commercial use.