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British Marine VAT lobbying win

Published on: 23 July 2020

British Marine has secured a welcome win for the holiday hire boat sector as HMRC reverse their decision on the applicability of the VAT rate reduction. HMRC have now confirmed that the temporary reduction to 5% for holiday accommodation does apply to those hiring out boats (inland and coastal) which are to be used for overnight accommodation. 


On 14 July, confirmation was received from HMRC that the reduction of VAT to 5% for holiday accommodation would not apply to those businesses hiring recreational craft with overnight accommodation. British Marine immediately mobilised to challenge this position taken by HMRC with the belief that by not including the leisure marine industry within the scope of holiday accommodation for VAT purposes, HMRC would be supporting anti-competitive activity by favouring other industries in the tourism sector.


An emergency meeting hosted by British Marine along with representatives of the trade formed the basis for lobbying HMRC to ensure a level playing field for all holiday accommodation providers.


Lesley Robinson, CEO of British Marine, said; “This is a fantastic result for the overnight holiday hire boat sector and shows the power of British Marine’s and our associations collective lobbying efforts, and I do hope this now provides the industry with the clarity they were looking for. As the Great British staycation continues, coupled with our industry wide boating awareness campaign ‘Summer On The Water’, I hope that the VAT reduction will bring our members a successful remainder of the season through this saving.”


Lesley Yates, Canal Boat Cruises in Lancashire

“We are delighted to hear that the VAT reduction will now apply to holiday hire boats. This has come as a welcome relief and lifeline to us as a small family business.  Although our holiday hire boats only provide us with around 25% of our business turnover, the fact that our trip boat and wedding venue are still unable to operate means that the holiday side of our business is helping to sustain the future of Canal Boat Cruises by allowing us to compete on a level footing with other holiday accommodation businesses in the country.”


Nigel Hamilton, Chair of the British Marine Inland Boating Association (BMIB) 

"The hire industry has experienced unprecedented challenges in recent months, along with other parts of the UK tourism sector. BMIB have worked closely with our members and with BM centre to address numerous sector specific issues during COVID-19. We are very pleased that effective lobbying has now influenced HMRC to review the VAT reductions and include holiday boat hire.”


HMRC have now officially published official confirmation in VAT Notice 709/3, specifically under section 5.1, which says:

“The hire of a boat will qualify for the temporary reduced rate provided that it is suitable for holiday accommodation and is being held out in this way. Boats being hired for a day to enjoy the activity of sailing for example will not qualify for the temporary reduced rate as they are not being used for holiday accommodation."


British Marine and HMRC continue to work together to develop further leisure marine industry guidance to ensure that other parts of our industry, such as mooring providers, are not treated unfairly and are aligned with other sectors, such as caravan parks.