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HMRC internal manual

VAT Transport

HM Revenue & Customs
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Zero-rating of passenger transport: Cruises: General

This paragraph applies to sea and river cruises (including holiday cruises on international or domestic waters, and Disco Float, Party Float, Wine and Dine and similar entertainment cruises) provided from the supplier’s own resources, rather than being bought in from a third party and re-supplied.

A supplier is regarded as providing a cruise from his own resources if he:

  • uses his own ship; or
  • charters a vessel from the owner for a period of two years or more, whether only with deck/engine crew or with both deck/engine crew and “hotel” (domestic/ catering) crew (the vessel need not necessarily be in service continuously throughout the period but the owner must not have the right to use the vessel to make supplies to any other customer during the period); or
  • takes a vessel including deck/engine crew but employs or engages his own “hotel” (domestic/catering) staff.

The services of intermediaries making arrangements for the supply of such a cruise is zero-rated under Group 8, Item 10(b) to the extent that the cruise is zero-rated in the UK.