UK (maybe EU) VAT issue?

[goboatingnow]

If the boat sale , or the bill of sale has EU addresses then I'd say nothing. Failing that I'd say nothing.

Dave

[boatman61]

Originally Posted by goboatingnow

If the boat sale , or the bill of sale has EU addresses then I'd say nothing. Failing that I'd say nothing.

Dave

David....!! I'm Shocked...

[goboatingnow]

Originally Posted by boatman61

David....!! I'm Shocked...

I feeling mellow after a few glasses of Shiraz , it happens occasionally , normal service will resume presently...

Dave

[boatman61]

Originally Posted by goboatingnow

I feeling mellow after a few glasses of Shiraz , it happens occasionally , normal service will resume presently...

Dave

I'm on G&T's...

[savoir]

So take a hint from DOJ's post. If the boat has been registered on the SSR in recent years you will not owe any VAT at all. Where the boat sat matters nought.

[Geoff54]

This is a notoriously gray area and you should REALLY seek professional advice. Having said that, I looked into this a few years ago – the following may not be current and is from memory:

Boats built before January 1st 1985 are deemed to be VAT Paid. Come and go as you wish.


If a boat leaves the EEC and is “re-imported” by the same owner within three years, no taxable event has been generated and no VAT is payable.

If it is being brought back after three years or under different ownership, a taxable event has been generated and VAT is due.

Even if a taxable event has been generated, there are various circumstances when VAT Relief for Returned Goods may be claimed. I can't remember the details but Dockheads list sound right.


If VAT is due, it is due at the "EEC Port of Entry" and is then deemed “paid” for the entire EEC. Different countries have different rates of VAT and different protocols for establishing the value on which VAT is to be charged. It pays to pick your port of entry.


Personally, I think it is wrong to charge VAT twice so if ......

[Zanshin]

Well, I sold my UK registered and VAT paid boat while outside of the EU and I found out that Paragraph 3.5 quoted earlier on in this thread applied - the VAT paid status reverted to VAT unpaid. Had I consummated the deal 80 miles further west in St. Martin (on the French side) the VAT paid status would have remained for the new owners.

[Emmalina]

I was told by Italian customs that anything pre 1979 was not eligible for VAT don't know if thats rule of thumb in the whole EU/UK Think it might be 30 years though..

[Dockhead]

Originally Posted by savoir

So take a hint from DOJ's post. If the boat has been registered on the SSR in recent years you will not owe any VAT at all. Where the boat sat matters nought.

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.

[David_Old_Jersey]

Originally Posted by Dockhead

I would not be so light-minded about it. If the OP wants to cheat, that's his business

Just to clarify, I was not suggesting nor recommending that OP (or anyone else) do anything illegal. Honest .

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?

+1

[K_V_B]

Originally Posted by Dockhead

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.

It's actually not when it was build that matters, it's when it was placed in the EU market.
So if you buy a 1977 boat in the US that has never been in Europe, and sail it over, you will pay VAT.
If you buy a 1977 boat that left the EU, and then return with it, you might have to pay VAT also.

BTW, in some countries (my native Belgium for one) you did pay VAT on second hand boats until the 90ies, even if the boat had not left the country. When my father bought the boat he found this outrageous, and decided to cheat a bit. He just agreed with the seller that he'd pay X, but that they would put Y on the bill of sale, with Y being substantially less. He then took that to the tax office. He only regretted afterwards of not even having put a lower value on the bill of sales, as the officials at the office didn't have the slightest interest in the value of his boat. They just want the figures to add up.

[goboatingnow]

If VAT is due, it is due at the "EEC Port of Entry" and is then deemed “paid” for the entire EEC. Different countries have different rates of VAT and different protocols for establishing the value on which VAT is to be charged. It pays to pick your port of entry.

Not withstanding that the "EEC" is long gone, NOTE for "means of transport" VAT is technically only paid in the "country of destination" .Hence you cannot VAT shop. The "country of destination" has been interpreted by UK Revenue as being that place where the vessel is "habitually" kept or failing that the country of its owner ( this applies to all such vessels over 7m)

Note that VAT deemed paid, ie being in teh EU before a certain date is a fucntion of (a) VAt rule changes appplied across all countries and also individual accession agreements . It is not consistent across Europe. in the UK this date is 1st January 1985, ( note not the vessel build date, the vessel must be in the EU before that date).


As to the issue of whether its imported or not, importation is the process of bringing goods into the customs union of the EU. Yes in fact in effect ships are imported, but the law recognises that fact and reliefs and waivers are applied ( the same is true for things like railway freight cars and containers, they are all granted relief).

VAT is a transaction tax, it can be charged MULTIPLE times on a assets life depending on what transactions are applied to it.

Dave

[Geoff54]

Originally Posted by Dockhead

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.

Again, this is from memory from a few years ago, when I was considering moving back to the U.K., so I'm not guaranteeing it is completely correct but....

I think once a vessel has left the E.E.C. for three years it is deemed to have been exported. Although I didn't think about shipping, I imagine that the rules are different for vessels engaged in international trade. Even pleasure craft can be temporarily imported to U.K. without paying V.A.T. as long as you file the correct forms and remove it within the stipulated time.

V.A.T. regulations are suppose to be harmonized across the EEC but this is still a work in progress, so getting expert advice and importing to the correct country before moving the boat to the U.K. can effect how much you pay. At least that used to be the case and with the problems within the E.E.C. I doubt that has changed much.

[goboatingnow]

V.A.T. regulations are suppose to be harmonized across the EEC but this is still a work in progress, so getting expert advice and importing to the correct country before moving the boat to the U.K. can effect how much you pay. At least that used to be the case and with the problems within the E.E.C. I doubt that has changed much.

Sorry just again, I must just state, for "means of transport" ie boats over 7m, VAT must be paid in the country of destination not the first country you happen to hit. if the boat is to be berthed and owned in the UK , the Vat should be paid there. This is often done incorrectly ( paid in the azores etc) a UK destined boat paying VAT in the Azores has not in fact settled its VAT bill with HM revenue and is in fact not VAt paid, even if she has receipts etc

Since the Single European Act VAT is harmonised across the EU, but there are some country specific opt-outs and opt-ins. ( as part of the negotiations leading up to teh Single European Act) Note that the enforcement of VAT law and the collection of VAT is NOT harmonised across the EU, so local differences can occur.

The UK has one of the best enforced and most diligently applied EU VAT regimes.


As it technically and legally stands if the sale was carried out outside the EU , then without any further information VAT is due in its country of destination , The UK, when the buyer returns.

in practice, if the boat is UK registered, there is no record in the Uk of its journeys so one can question where the boat is. Hence it could be brought back under the guise or never having been away ( if you see what I mean)

However if the bill of sale has foreign addresses, Id be far more careful as there is now a documentation trail.

dave

[Geoff54]

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

Originally Posted by goboatingnow

Not withstanding that the "EEC" is long gone

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

Originally Posted by goboatingnow

VAT is technically only paid in the "country of destination" .Hence you cannot VAT shop. The "country of destination" has been interpreted by UK Revenue as being that place where the vessel is "habitually" kept or failing that the country of its owner ( this applies to all such vessels over 7m)

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....

Originally Posted by goboatingnow

VAT is a transaction tax, it can be charged MULTIPLE times on a assets life depending on what transactions are applied to it.

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.