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VAT rejection

VAT rejection


We (a Yacht Consultancy) have recently applied for a VAT number for a UK based company that has been dormant since 2013 but that is due to start making taxable supplies in approx. 1 year

The Company is fitting out yacht which will take approx.1 year and will then be chartered out on short contracts to clients wishing to use it for advertising. The company would like to claim the VAT where possible on the refit costs.

After the initial online application HMRC requested additional info by way of a questionnaire (Business address / business activity / expected taxable turnover etc) after several weeks they have replied that the are 'not satisfied with the objective evidence to show that you are in business and either making or intending to make taxable supplies'

They will not speak to me directly as I am not authorised by the Director who is away on annual leave for 2 weeks.

Has anybody else been in this situation and suggest what 'objective evidence' we could provide that would prove we are intending to make supplies? or perhaps you are not able to register so far in advance of trading?

Much appreciated.

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By DMGbus
07th Mar 2016 14:06

HMRC (VAT) don't like yachts!

Read HMRC IG VIT44200 for HMRC's attitude to yachts and VAT registration.

http://www.hmrc.gov.uk/manuals/vitmanual/vit44200.htm

See if you can workaround HMRC's objections / satisfy HMRC's sceptism that the yacht is not going to a director's plaything sponsored in part by a VAT refund.

 

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07th Mar 2016 14:07

Evidence for the making of taxable supplies

Some sort of business plan, web site, sales enquiries or orders. There is no limit as to how long before making taxable supplies you can register. A forestry business might make no supplies for many years!

You can challenge their decision not to allow registration, but you will have to be able to show that HMRC have acted unreasonably. And that will depend on the quality of evidence provided.

... and HMRC don't like yachts! But you know that.

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07th Mar 2016 15:41

Interesting

Will see what we can do to plead our case. The yacht does have perfectly genuine ambitions however evidence is thin on the ground. It looks like 'honest guv' isn't going to cut it.

Great link though and thanks for your time.

 

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By DJKL
07th Mar 2016 15:59

How to make a small fortune

Yachts are certainly the way to make a small fortune, all you really need to start is a large fortune.

Very surprised if you can get a business plan to work; we spent about three years yacht chartering in the Med and burned our way through circa £500,000 re operating losses and loss on sale. (Crewed charters with crew costs/moorings/insurance/maint etc all to be met)

 

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By Ruddles
07th Mar 2016 16:04

Sounds familiar, DJKL

I once ordered online a publication entitled "How to make a small fortune from owning horses".

Imagine my dismay when I opened the package to find a single sheet of paper that simply said "Start with a large fortune."

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