VSWB4040 - 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. The principles set out in VEXP90000 Assessments, adjustments and demands for tax also apply here.

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, including any security deposit held.

If evidence is subsequently produced an adjustment can be made in the VAT return covering the time the evidence was held (see VEXP90700).

Out of time forms

Vessels must be exported within 6 months of supply. Where the date of export is outside the permitted time limits the supply must not be zero-rated unless HMRC or a Border Force Officer has specifically authorised the delay in writing. This applies even if the export documentation has been certified. If such supplies have been incorrectly zero-rated an assessment should be issued.

Commercial supplies

Where the business has used the Sailaway Boat Scheme for commercial supplies then zero-rating should be disallowed unless the conditions in Notice 703 Exports of goods from the United Kingdom are met. The assessment should be calculated by applying the VAT fraction to the consideration received, including any security deposit held.