Upfront versus financed tax
Paying the tax yourself keeps it out of the loan, so you borrow less and pay less interest. The trade-off is more cash at completion.
On a £60,000 boat at 7.5%, the tax is £4,500. Financing it would add that to the balance for the whole term.
Worked example
With the £4,500 paid upfront and a £12,000 deposit, £48,000 is borrowed. At 8.5% over 10 years the payment is £595.13.
Total interest is £23,415.76 and the total cost including deposit and tax is £87,915.76, against £90,110.98 when the tax is financed.
Which is better
If the cash is available, paying the tax upfront saves the interest on it. If it would leave you without a reserve, financing it can be the safer choice.
Compare the interest saved with what the cash would otherwise earn or protect.
Inputs for the boat loan taxes calculator
Vehicle price before tax
The agreed price of the boat, before tax.
Sales tax or VAT rate
The rate where the boat is registered.
Deposit or down payment
Cash paid upfront, taken off the tax-inclusive price.
Interest rate (nominal, not APR)
The yearly rate before monthly compounding.
Term
How many months you will take to repay the loan.
How the tax is paid
This page starts with the tax paid upfront; switch to finance it if you prefer.
CALCULATOR QUESTIONS
Boat loan calculator with taxes questions
How much is saved by paying the tax upfront?
In the example, £2,195.22 of total cost, because no interest is paid on the £4,500.
Can I switch the treatment?
Yes. The input lets you finance the tax if you want to compare both.
Does the deposit come off before tax?
This calculator takes the deposit off the tax-inclusive price. Local rules may differ.
Is boat tax always 7.5%?
No. Rates vary by country and sometimes by boat size or use.