Hire of Boats or cars to carry out fieldwork & VAT

The tax treatment depends on a number of things:

Transport as part of other services

Where the supply of the transport is incidental to a larger supply of services. For example where you are being charged for sample collection services as well as the transport required to perform the sample. The supply of transport would take on the same tax treatment as the wider service being performed. In this instance the entire costs would be taxable as a standard rated supply.

Using means of transport without a driver/other crew

Where the supply is of the means of transport without a driver:

• The supply of a ship with a gross tonnage over 15 tonnes which is neither designed nor adapted for use for recreation or pleasure – is a zero rated supply.
• The supply of a car without a driver is a standard rated supply.

Supply of passenger transport services

Passenger transport services are supplied when a vehicle ship or aircraft is provided together with a crew. 

• The supply of services under the charter of a qualifying ship is a zero rated supply.
• The supply of passenger transport in a vehicle, ship or aircraft that is capable of carrying at least ten passengers is zero rated.
• Passenger transport supplied outside the UK. If the supply takes place:
  1. In another EU member state then the supply will be taxable in the country it takes place in.
  2. Wholly outside the EU – then this is not subject to UK tax but would be taxed in the country in which it occurs.

Multiple supplies

Where for example you are supplied the means of transport and are separately charged for the supply of a driver or other crew members then the following has to be considered:

• If the different elements are subject to different negotiations and customer choice,
• The elements are separately identifiable and separately charged
• They could be omitted

Then you have to look at each element on its own to determine the VAT treatment. E.g.

• The supply of transport without a driver
• The supply of a driver – which would be a taxable supply of staff