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Old 20-06-2013, 08:19   #1
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UK (maybe EU) VAT issue?

I just bought a boat outside the EU (a long way outside) at a bargain price - an abandoned cirumnavigation.

1977 - fully documented, proof of original VAT paid in UK. All seemed OK. The problem is that it has been outside the EU for 5 years. I will soon be heading back to the UK, but I recently read that any boat which leaves the UK for 2 years becomes liable for VAT again on re-entry. Does anyone know if this is true? if so, does it apply in the whole of EU?

I blew my budget on this boat, it was too good to pass up. I can't afford the VAT.

If this is true, it just seems like extortion. What justification could there be to charge the same tax twice - and VAT is higher now.

Does this mean that any UK or EU circumnavigators have a two year window or a very large bill???
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Old 20-06-2013, 08:30   #2
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Re: UK (maybe EU) VAT issue?

Quote:
Originally Posted by maping View Post
I just bought a boat outside the EU (a long way outside) at a bargain price - an abandoned cirumnavigation.

1977 - fully documented, proof of original VAT paid in UK. All seemed OK. The problem is that it has been outside the EU for 5 years. I will soon be heading back to the UK, but I recently read that any boat which leaves the UK for 2 years becomes liable for VAT again on re-entry. Does anyone know if this is true? if so, does it apply in the whole of EU?

I blew my budget on this boat, it was too good to pass up. I can't afford the VAT.

If this is true, it just seems like extortion. What justification could there be to charge the same tax twice - and VAT is higher now.

Does this mean that any UK or EU circumnavigators have a two year window or a very large bill???
You should check with real experts and not with us. This is a far too serious question to rely on Internet hearsay.

AFAIK, you can stay out of the EU as long as you want. HOWEVER, if a VAT-paid boat is bought and sold outside of the EU, its VAT-paid status is destroyed, and you have to pay VAT again when you reenter.

If you can possibly undo the deal (on paper), take a lease of the boat with option to buy, then buy it when the boat has been cleared back into the UK, you might be able to prevent that.

But again, I am no expert, and I doubt that anyone on here really is. You might call the RYA, but in the end you will need a good tax advisor.
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Old 20-06-2013, 08:33   #3
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Re: UK (maybe EU) VAT issue?

Quote:
Originally Posted by maping View Post
I just bought a boat outside the EU (a long way outside) at a bargain price - an abandoned cirumnavigation.

1977 - fully documented, proof of original VAT paid in UK. All seemed OK. The problem is that it has been outside the EU for 5 years. I will soon be heading back to the UK, but I recently read that any boat which leaves the UK for 2 years becomes liable for VAT again on re-entry. Does anyone know if this is true? if so, does it apply in the whole of EU?

I blew my budget on this boat, it was too good to pass up. I can't afford the VAT.

If this is true, it just seems like extortion. What justification could there be to charge the same tax twice - and VAT is higher now.

Does this mean that any UK or EU circumnavigators have a two year window or a very large bill???
If you got the boat for a bargain price, shouldn't the VAT be based on that price?
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Old 20-06-2013, 08:33   #4
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Re: UK (maybe EU) VAT issue?

So far as I know provided the boat has not had a flag change in the interim there should be no VAT on re-entry but check with HM Customs & Excise and get accurate info from the people who should know.
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Old 20-06-2013, 08:40   #5
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Re: UK (maybe EU) VAT issue?

3.4 Will I have to pay taxes or duties on my pleasure craft?

Vessels less than 12 metres long are potentially liable to customs duty when imported from outside the EU and all vessels designed or adapted for recreation or pleasure use are potentially liable to VAT.
If you are temporarily importing your boat from outside the EU, it may qualify for relief from these charges as described in Section 5.
If you are permanently importing the boat on transfer of your residence from outside the EU, it may qualify for the relief described in sub-section 3.15.
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, and
  • imported by the person who exported it from the EU, and
  • it has undergone no more than running repairs outside the EU that did not increase its value.
For more information refer to Notice 236 Customs: Importing returned goods free of duty and tax.
If, after reading this notice, you are still in any doubt about whether customs charges are due, you should contact the VAT, Excise & Customs helpline on 0845 010 9000.
top ^
3.5 Can a vessel lose its VAT paid status?

VAT is due on the importation of any vessel from outside the EU. However, there are provisions for this VAT to be relieved when an EU VAT paid vessel returns to the EU, refer to sub-section 3.4. If an EU VAT paid vessel leaves the EU, and whilst outside the EU it is sold, the new owner will, unless eligible for one of the reliefs described in this Notice, be liable to pay VAT if the vessel is brought back into the EU.

HM Revenue & Customs


If there is no change of flag, then I don't think the boat has been "exported" for purposes of Section 3.4

But you are screwed by the purchase-sale transaction outside of the UK.
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Old 20-06-2013, 08:42   #6
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Re: UK (maybe EU) VAT issue?

Better news:

3.15 Are there any additional requirements if I am transferring my residence to a place in the EU?

If you are moving your normalhome from a non-EU country to an EU country, including the UK, you may import your vessel free of customs duty and VAT providing that you:
  • have lived outside the EU for a continuous period of at least 12 months, and
  • have possessed and used the vessel outside the EU for at least 6 months prior to importation, and
  • did not get the vessel under a duty/tax free scheme (see below), and
  • declare the vessel to an officer, and
  • will keep the vessel in the EU for private use, and
  • do not sell, lend, hire out or otherwise dispose of the vessel in the EU within 12 months of importation unless you notify the Personal Transport Unit first, on 01304 664171, and duty and VAT is paid on disposal.
HM Revenue & Customs

So if you've been out of the EU for at least 12 months and have owned the boat for at least 6 months, and you are moving back to stay, you're ok in any case.

One more time: Get professional advice!!
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Old 20-06-2013, 08:42   #7
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pirate Re: UK (maybe EU) VAT issue?

In the UK it used to be that after two years the boat was considered an import and VAT liable on a value assessed by a customs inspection/survey.... or at least that's my understanding...
However... the location you bought the boat may have some bearing on things...
I bought a French boat in St Martin (French Side)... although it had been away from Europe a few years it had been staying regularly in various French Caribe territories so escaped the VAT trap... papers came back from Brest all stamped and signed.. no probs..
If I were you I'd just sail her to Europe via the Azores.. present your papers as normal... Passport/Bill of Sale/SSR reg/VAT Papers etc and see what happens... likely it'll be like me in a US Hunter... no one cares... they look at the flag and that's it...
EU ignore, Foreign jump on em
The date of build may be enough to exempt it if EU/UK make.
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Old 20-06-2013, 08:54   #8
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Re: UK (maybe EU) VAT issue?

Quote:
Originally Posted by SteveT View Post
So far as I know provided the boat has not had a flag change in the interim there should be no VAT on re-entry but check with HM Customs & Excise and get accurate info from the people who should know.
FFS don't do that!

If OP has not changed the flag (presumably was and still is UK Reg - Part 1 or SSR) therefore the registration addresses will all have been in the UK (Vendor during ownership and now OP) then no way for officialdom in the UK to know boat has not been sitting happily in the Solent for the last 5 (or whatever) years. Add in that if a UK National (with passport) their is no requirement to check back in (or out) with anyone official when travelling overseas (therefore they don't know you have gone anywhere if not by commercial means ) then I personally would not trouble anyone with any details.

For resale you have the VAT receipt if a Purchaser (or foreign official asks or cares), plus per the paperwork the boat has never left the UK (let alone the EU). Going in OP's favour is that it's an older boat (1977) and likely of no great value (it's not 100k+ of shiny new Beneteau) with a UK flag on her so any VAT matters are a concern only for the UK.

Of course there is a risk if VAT is due of a large bill landing on doormat (hey, there is always a reason why things are cheap!) - and possibly also a slap on the bum, how hard will depend on whatever - but unlikely to get the death penalty (it's not Texas ).
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Old 20-06-2013, 08:57   #9
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Re: UK (maybe EU) VAT issue?

BTW, I am always amazed that folks come up with these questions after doing the deal.........apart from knowing beforehand what bills are coming later it would be damned useful info when haggling on price.
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Old 20-06-2013, 09:07   #10
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pirate Re: UK (maybe EU) VAT issue?

Quote:
Originally Posted by David_Old_Jersey View Post
BTW, I am always amazed that folks come up with these questions after doing the deal.........apart from knowing beforehand what bills are coming later it would be damned useful info when haggling on price.
LOL.... that's why I feel all who sail/buy boats should learn fundamental chess tactics... learn to think 3-5 moves ahead..
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Old 20-06-2013, 10:32   #11
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Re: UK (maybe EU) VAT issue?

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Originally Posted by David_Old_Jersey View Post
BTW, I am always amazed that folks come up with these questions after doing the deal.........apart from knowing beforehand what bills are coming later it would be damned useful info when haggling on price.
DOJ, Boat was bought in a rush - no haggling, 50% reduction from what was a fair price, but an inconvenient location. It was a "buy it now or lose it" situation. Even at 50% off, my piggy bank was empty. The next day, there were 2 other potential buyers waving cash around.

I knew it was VAT paid, and I believed that was sufficient. I would still have bought it If I had known that VAT status was questionable at best. but I would have subsequently made different plans.

I have a really bad internet internet connection, so browsing HMCE website is horribly slow.

The boat is over 12m I can't find anything on the website about that.

Does over 12m make life simpler or tougher.

Oh and the admiral is not an EU citizen, so sneaking in a dead of night would be a bad thing.
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Old 20-06-2013, 10:39   #12
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Re: UK (maybe EU) VAT issue?

I don't see how the boat length is important for VAT.

BTW I would be careful about adding anything to this thread which identifies you and boat and voyage plans / times......can't be too many UK Nationals returning to the EU on a 1977 made boat longer than 12 metres with a non EU female citizen aboard as it is..........and some bits of the EU are a bit broke so quite keen on raising taxes. some of them may even be on the internet.
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Old 20-06-2013, 10:40   #13
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Re: UK (maybe EU) VAT issue?

A very important factor is missing from the first post.

Where has the boat been registered for the past 5 years ?
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Old 20-06-2013, 10:46   #14
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pirate Re: UK (maybe EU) VAT issue?

Excellent advice...
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Old 20-06-2013, 17:35   #15
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Re: UK (maybe EU) VAT issue?

I'm not trying to evade VAT, I am trying to legally avoid it (taking a leaf out of the Google book) It may be that some course of actions means that I become liable, while another does not.

Obviously, I am (belatedly) looking for option 2.

For example, as one contributor suggested, I "unbuy" the boat, deliver it to the UK for the (P)O, decide that I like it and buy it again when I am physically in the UK. I suspect that would come under the evasion category though.
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