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Old 30-01-2017, 03:44   #1
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VAT Nightmare

Can anyone help with VAT on a boat purchase - looking at a 16m monhull which was purchased in Holland some 2.5 years ago and VAT was paid at the time.
The owners sailed around Europe and then onto the Caribbean where it was then sold in Antigua about 9 months ago to a new owner who never used it and it is back up for sale again.
The broker tells us we would need to pay VAT on it if we brought it back to the EU - is he correct?
HMRC Notice 8 : - says vessels LESS than 12m in length are liable for customs duty when imported for outside the EU - does this mean most boats are exempt???
It also states boats VAT paid and re-imported back into the EU may qualify for relief if done within 3 years of export.

All advice most appreciated.

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Old 30-01-2017, 09:37   #2
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Re: VAT Nightmare

I think you are going to have to pay the VAT again. The paragraph you referred to has 3 conditions which you probably don't meet.

A boat previously VAT paid and exported from the EU may also qualify for relief on return if:

imported normally within 3 years of its export from the EU
imported by the person who exported it from the EU
it has undergone no more than running repairs outside the EU that did not increase its value

Your options are do nothing particularly if you have a copy of the original VAT receipt, or write to HMRC for advice because you will want the answer in writing, but you will tip HMRC off about the transaction if you do. Suspect the VAT is going to be a large sum on a 16m 2.5 yr old yacht.

There might be one "get out" that is importing something called "chattels" which allow you to return to the UK with your possessions without paying duty on them. You will need advice from HMRC if the yacht will qualify.



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Old 30-01-2017, 09:58   #3
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Re: VAT Nightmare

You can take it to Europe without paying VAT. The boat the has to leave the european VAT area at the least 3 yaers later to go to a non VAT european zone. Get proof of entry in that country and then another period of 3 years starts.
Probably the UK by that time will also be non European, like Turkey, Algeria, Marocco, Tunesia etc. Norway? don't know.
So not to nightmarish .
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Old 30-01-2017, 10:02   #4
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Re: VAT Nightmare

I learned this lesson on my VAT-paid U.K. previous boat. In my case I was within the 3 year limit, but the actual sale took place outside of the E.U. so the VAT status went *poof*. Unfortunately the "chattels" mentioned by Pete7 only apply if you yourself have been domiciled outside of the U.K. and are returning residency to the U.K. _and_ the boat has been in your ownership for a year.
-Zanshin (SV Zanshin)
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