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Sea Fishing Charter Boat depreciation policy

Sea Fishing Charter Boat depreciation policy

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Hello,

A client has a Ltd Co operating a sea fishing charter boat being an 11.4 metre Swiftcat catamaran (MCA Cat 2).

The boat was ordered new and the cost consists of fees paid direct to the boatbuilder plus various fitting out and finishing costs invoiced separately from other suppliers totalling approx £160k to get it on the water and tested for sea worthiness.

Will the usual capital allowances be available i.e. AIA apply or are there any other boat specific considerations?

Can anyone with experience of similar boats give me an idea of a suitable depreciation policy?

Annual turnover is likley to below £100k and there are no plans to expand the business or borrow externally.  Are there any specific reasons not to prepare FRS105 accounts?

Many thanks

Replies (4)

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By Tim Vane
18th Aug 2019 20:21

You can claim AIA or claim shipping capital allowances if that offers you more planning opportunities for the future intentions of the business. You will need to discuss with your client.

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Hallerud at Easter
By DJKL
18th Aug 2019 20:55

I appreciate off topic but how will the BIK calc work? That would be my slight concern, availability for director's personal use surely being a danger area.

When we had a yacht charter business (Med) we did not have a BIK issue as we were an LLP not a Ltd, notwithstanding this we made sure all use by members was paid for at market price. Ours was a somewhat larger vessel, it had a crew of two permanently aboard and did not go anywhere without the hired skipper sailing it.

This actually got us out of a possible vat issue back then (Lennartz- not sure still on point) as the log tallied precisely with the charters.

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By Kaylee100
19th Aug 2019 13:30

Yes, there are things to consider. You will need to do some research.

Some boats (not all though) don't really depreciate apart from for the "newness factor", so AIA/WDA claims need to be made on those boats with care. I ALWAYS discuss with the client the type of boat and likely value falls and I have an annual discussion with clients on the claims we make so they are fully aware of the situation they are in.

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Replying to Kaylee100:
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By CWservices6064
21st Aug 2019 12:08

Hi,

Thanks for the reply.

Are you looking at AIA/WDA claims from the point of view of a potential sale in the future creating a significant BC?

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