Reclaiming the VAT on Paint Purchases

There are two circumstances in which no VAT is payable on paint purchased from us for application to your vessel: if it is a) - a Qualifying Ship or b) - a Houseboat. See below for definitions. We will be able to refund any VAT that  you have paid on paint and related supplies that you have purchased from us, provided that you meet the conditions and complete the necessary paperwork.

A. Qualifying Ship - both conditions must be met to qualify

- The ship must be over 15 tonnes. For VAT purposes only, tonnage is defined by the internal volume of the vessel in cubic metres multiplied by a factor. The internal volume is calculated by multiplying together the length, beam and vertical height at the midpoint (all in metres). The multiplying factor is 0.235 for vessels longer than 24 metres and 0.16 for vessels less than 24 metres in length. All measurements must exclude any appendages that do not add to the internal volume.

- The ship is neither designed nor adapted for use for recreation or pleasure. To be a Qualifying Ship it must be designed for commercial purposes or to be used for permanent residential living by the owner. If your ship does not have any features that indicate a commercial design (such as a cargo hold, commercial fishing equipment, or the ability to convey a large number of passengers) or of permanent residential living then it is not a Qualifying Ship.

Examples of vessels that may be Qualifying Ships:

Submarines

Tugs

Trawlers

Hovercraft

Light vessels

Fire floats

Dredgers

Dutch barges

Lighters

Mobile floating docks or cranes

 

Examples of vessels that will not be Qualifying Ships:

All ships under 15 tonnes (calculated using the methos above)

Narrowboats (these will alway be under 15 tonnes)

Yachts (designed for recreation or pleasure)

Motor Cruisers (designed for recreation or pleasure)

Power Boats (designed for recreation or pleasure)

 

For more information on Qualifying Ships, see HMRC Reference: Notice 744C (July 2011)

 

B. Houseboat

- To qualify for zero rating, a houseboat is defined as a floating structure which is designed or adapted for use solely as a place of permanent habitation and which does not have, and cannot be fitted with, a means of self-propulsion. Note that a houseboat does not have to be more than 15 tonnes to qualify for zero rating of VAT.

 

For more information on Houseboats, see HMRC Reference 701/20 (February 2004)

How to reclaim a VAT refund on paint purchase from SML Paints and Coatings

The taxman watches this one very carefully, so we must be able to satisfy the VAT inspector that a) you are eligible for zero rating of VAT on your paint purchased and b) that all the paint you purchased was for use on your vessel. To this end, it is important that the quantity of paint you are purchasing bears relation to the area to which the paint is being applied and that you declare to us in writing that the paint we supply will be applied to your vessel. 

To satisfy the conditions above we need from you:

 

For a Qualifying Ship

- A copy of a Certificate of Gross Tonnage for your vessel from an accredited marine surveyor. Before instructing a surveyor and incurring the associated costs, we suggest you carry out your own measurements to make sure your boat is over 15 tonnes.

- Details of the length, beam, draft and air of your vessel. This is so we can demonstrate that the quantity of paint you have purchased meets the requirement of your vessel.

- Details of the areas of the vessel you intend to paint.

- Photographs of your boat showing it before painting begins, during painting and after painting has been complete. Once of each will be sufficient. If possible these photographs should be date stamped. If not date stamped please confirm the dates on which the photos were taken.

- Details of when and where the work will be carried out. If you are dry-docking, please provide details of booking.

- A completed Undertaking of Use for a Qualifying Ship statement. Please print and return the completed form via email to malcolm@smlpaintsandcoatings.co.uk, via fax to 01285 861590 or via post to SML Paints and Coatings, The Downs, South Cerney, Cirencester GL7 6DD.

 

For a Houseboat

- Photographs that demonstrate that your houseboat is not fitted , and cannot be fitted with an engine for self-propulsion.

- Details of the length, beam, draft and air draft of your vessel. This is so we can demonstrate that the quantity of paint you have purchased meets the requirement of your vessel.

- Details of the areas of the vessel you intend to paint.

- Photographs of your boat showing it before painting begins, during painting and after painting has been complete. Once of each will be sufficient. If possible these photographs should be date stamped. If not date stamped please confirm the dates on which the photos were taken.

- Details of when and where the work will be carried out. If you are dry-docking, please provide details of booking.

- A completed Undertaking of Use for a Houseboat statement. Please print and return the completed form via email to malcolm@smlpaintsandcoatings.co.uk, via fax to 01285 861590 or via post to SML Paints and Coatings, The Downs, South Cerney, Cirencester GL7 6DD.

 

Other Points to Note

- When you initially place your order we will require you to pay the VAT. Once we receive the documentation outlined above we will make a refund of any VAT repayable within 5 working days.

- You must let us know in writing (email will suffice) within 5 working days of your purchase that you wish to reclaim some or all of the VAT that you have paid.

- The documentation that we require in order to repay you the VAT must be received by us within 60 days of the purchase to which it applies, unless agreed otherwise in writing.

- We recommend that you contact us before you place your order, as we reserve the right to refuse repayment of VAT if you fail to provide is with the documentation outlined above or if we believe that your circumstances do not make you eligible for zero rated VAT.