UK (maybe EU) VAT issue?

[savoir]

Originally Posted by Dockhead

I would not be so light-minded about it. If the OP wants to cheat, that's his business, and I'm not condemning it (I do agree that charging VAT twice is outrageous on principle). But he had better be careful about it.

The bill of sale is an important document, which he may be required to show somewhere as proof of ownership. God knows where it might end up. If it shows that the deal was consummated outside the EU, then the OP is screwed.

If he wants to cheat and get away with it, he'd better be sure that he has a perfect set of documents. Otherwise, he will be sailing with a sword of Damocles hanging over his head. Who needs that?

Much better, I think, to do it in an airtight legal way, if there is one. For example, if it is really true that pre-1985 boats are anyway exempt, then he doesn't have any problem. If he's moving back to the UK after an extended period abroad, then there should be another straightforward and completely legal way to deal with it.

Two words: professional advice! AND -- once he's got professional advice, don't pinch pennies -- get an official letter from the reputable professional adviser and keep it with the other boat documents.


Concerning "exporting" and "importing" boats -- I could be wrong, but I would be surprised if it is true that merely sailing around the world under a British flag and coming back into UK waters amounts to "exporting" and "importing" the boat. It's not logical -- what about ships? Are they "imported" every time they come into port from overseas? I don't think so. I would think that this would require a change of flag.

Light minded ? Oh well if you say so. As for cheating the only one raising that subject is you.

There is perfectly valid reason for asking where the boat has been. If it has been in Guadeloupe or Martinique at the right times during the past 5 years then no VAT is payable. Nothing light minded about that and no cheating either.

[boatman61]

Originally Posted by savoir

Light minded ? Oh well if you say so. As for cheating the only one raising that subject is you.

There is perfectly valid reason for asking where the boat has been. If it has been in Guadeloupe or Martinique at the right times during the past 5 years then no VAT is payable. Nothing light minded about that and no cheating either.

Or French Polynesia come to that...

[goboatingnow]

Originally Posted by Geoff54

I guess we were typing at the same time so I didn't see your reply before posting.

I guess I'm still behind the times. E.E.C. / E.U. blah, blah, blah

This didn't used to be the case. Either I received bad advice, the loophole has been closed or there is more to it that this. Maybe if you keep it in the original country for certain period of time. You could still go cruising....

Yes but in theory (although not always in practice) you should be able claim relief for V.A.T already paid on that asset. You SHOULD only have to pay V.A.T. on the difference in value, hence the name VALUE ADDED tax. It was also intended to be a flat 10% to make life easier.... but I digress.

As stated before, OP really needs pro. advice.

(A) vat is a transaction tax , unless you are vat registered you can and sometimes do pay vat multiple times on the same items. Vat is not an asset tax.

(B) vat at country of destination has been the case for over 20 years applies to car , trains , planes and boats. Buy a car in Ireland ,take it to the UK , guess where u pay the VAT ??? No difference with boats. I suspect you received bad advice

As for pro advice, you'll search to find anyone that understands boats , talk to the accountants of boat importers perhaps.

Dave ( used to be involved in commercial boats and importer exporter into the EU for 30 years )

[boatman61]

I believe if it is your 'only place of residence aka HOME' your exempt...
Until you want to sell... then the buyer has to pay...
But that advice is worth what its cost you...

[goboatingnow]

Originally Posted by boatman61

I believe if it is your 'only place of residence aka HOME' your exempt...
Until you want to sell... then the buyer has to pay...
But that advice is worth what its cost you...

Of you transfer you home from outside the EU to inside the EU yiu can bring in your possessions including means of transport VAT free. There are fairly strict rules on what determines TOR

In relation to VAT on a boat as your home Revenue fought a long court case and lost. However it applies to specific cases and the basis for it was a derogation the UK and Ireland got when they joined the EEC.

Dave

[Geoff54]

This is getting ridiculous. Next we’ll be arguing for a 800 old posts about some trivial details of RYA teaching. It’s the internet - Get over it. I’ve sworn off internet forums before because they get contentious, I think I might do it again.

The advice I got was from someone I who is an actual expert, not someone who imports boats. I would have provided a referral but they are now retired. As I said, this is from memory so I don’t guarantee all the details.

Originally Posted by goboatingnow

(A) vat is a transaction tax , unless you are vat registered you can and sometimes do pay vat multiple times on the same items. Vat is not an asset tax

You were the first to refer to it relating to an asset, “it can be charged MULTIPLE times on a assets life”. I prepared my share of V.A.T returns between it’s introduction to the U.K.(1970 if I recall correctly) and when I emigrated in 1983. I stand by my statement that, although theory and practice are not always the same, you SHOULD only have to pay V.A.T. on the difference in value, hence the name VALUE ADDED tax. Actually, I blame the French – they came up with the idea.

Originally Posted by goboatingnow

(B) vat at country of destination has been the case for over 20 years applies to car , trains , planes and boats. Buy a car in Ireland ,take it to the UK , guess where u pay the VAT ??? No difference with boats. I suspect you received bad advice

I suspect that there is more to this but unlike some, I am quite happy to admit that I don’t know all the details.

mapin – I hope you have gleaned something from all this. At least do some more research and don’t rely on us internet experts. Put a Chinese Rocna on the bow roller, a stainless shotgun in the rack and sail your new boat home.

Fair Winds and Farewell!

Geoff
Not a boat Importer, exporter.
Not A V.A.T. expert.
Retired and no longer gives two penneth of cold uric acid.

[maping]

Thanks for all the replies. I apologise for not responding sooner - my main hard drive died, took a while to get back up and running.

I am not trying to find a way to evade the tax, I am looking for ways to avoid having to pay it. I had not heard before about VAT expiring, or being nullified by the sale taking place offshore. I believed that if I had proof that VAT was initially paid, that was it. I don't want to sail into Plymouth to clear in, and innocently announce that I just bought the boat in Outer Mongolia.

I could go back to the PO, cancel the sale, and tell him I'll buy it later, when I have delivered it back to the UK for him. Though that would of course leave him with my money, legal ownership of the boat, and a long distance between us, so not a course I'd relish.

Maybe VAT is inescapable, in which case I had better not do anything to increase the boat's value. I certainly don't want a sword of Damocles suspended from the deck head. I want to be able to sleep easily and not feel obliged to depart in a panic at the sight of pinstripes and briefcase walking along the pontoon.

I could sell the boat to my wife (U.S. citizen), then we get 18 months in the UK, but not sure I want to promote the admiral that far

There are several options, I just have to find the best and safest.

Thanks again to all for the advice and comments.

[valhalla360]

Originally Posted by maping

Thanks for all the replies. I apologise for not responding sooner - my main hard drive died, took a while to get back up and running.

I am not trying to find a way to evade the tax, I am looking for ways to avoid having to pay it. I had not heard before about VAT expiring, or being nullified by the sale taking place offshore. I believed that if I had proof that VAT was initially paid, that was it. I don't want to sail into Plymouth to clear in, and innocently announce that I just bought the boat in Outer Mongolia.

I could go back to the PO, cancel the sale, and tell him I'll buy it later, when I have delivered it back to the UK for him. Though that would of course leave him with my money, legal ownership of the boat, and a long distance between us, so not a course I'd relish.

Maybe VAT is inescapable, in which case I had better not do anything to increase the boat's value. I certainly don't want a sword of Damocles suspended from the deck head. I want to be able to sleep easily and not feel obliged to depart in a panic at the sight of pinstripes and briefcase walking along the pontoon.

I could sell the boat to my wife (U.S. citizen), then we get 18 months in the UK, but not sure I want to promote the admiral that far

There are several options, I just have to find the best and safest.

Thanks again to all for the advice and comments.

The wife option may not be any better if you will be spending time on the boat in the EU. With temporary import, you aren't supposed to have EU citizens cruising on the boat.

Try setting up an anonymous email account and sending a request for clarification in to the authorities.

[tom1263]

The problem is the boat was more then 3 years outside the EU, with an change of the ownership. In this case, the VAT must be re-paid.

But.... was the boat within the time periode inside the EU customs territory, that should be no problem. Perhaps there is evidence for the presence of the boat in the EU customs area at any one time. Most often find these ....

EU customs territory

Fair Winds