Paying Boat Purchase Tax again

[sailingabe41ds]

I know some of this is already mentioned...
In California it is an annual property like tax of 1 + % they add a few xtra county and city taxes. Then if you are using the department of transportation, they add there yearly fees. Unlike the VAT, in the US/States every time you sell the boat you pay a sales tax which could be up to 11% in some places. The government could easily collect as much as the European VAT after the boat is sold and resold 2-3 times.
In some states, Washington, if you move from a state that did not have a sales tax, they will charge you one even if you did not buy the boat there.

Abe

[AKA-None]

Originally Posted by S/V Illusion

No. It’s a one time charge in the U.S.

The import tax is but yearly license fees per state may include a built in property tax

[Montanan]

Originally Posted by jen1722terry

Gees, I never thought of this issue.

I wonder if it applies to Canada?

We're Yanks from NH who brought our boat to our other home in Nova Scotia in '14 and returned it to the US in '16. While in Canada, we paid the import tax and kept the records. Our understanding was that we are now free to take the boat back and forth to Canada whenever we choose.

Now, with covid and all, it's been nearly 5 years since the boat was in Canada.
If we're allowed to sail to Canada this year, do we have to pay the tax again?

I better get on the phone to Canadian customs.

17 days to dump.

Cheers

FYI:

https://travel.gc.ca/returning/custo...orting-vehicle

Canadian legislation
Under Canadian legislation, returning goods to Canada after they are taken out of Canada is considered to be importing them. This includes Canadian-owned and registered vehicles that are transported to Canada by commercial carrier. Canadian goods returned to Canada are duty and tax free if they are returned to Canada without having been increased in value or improved in condition.

Repairs or alterations to your vehicle, vessel or aircraft
If you intend to have repairs or alterations made to your vehicle, vessel or aircraft outside Canada, check with the CBSA before you leave. The CBSA will no longer consider it to be Canadian-made if you increase its value, improve its condition or have it modified outside Canada. As a result, you may have to pay duty and the goods and services tax (GST) or harmonized sales tax (HST) on the entire value of the vehicle, vessel or aircraft when you bring it back.

You will not have to pay duty on the value of the repairs or alterations made to your vehicle, vessel or aircraft in the United States, Mexico, Chile, Costa Rica, Israel or another Canada-Israel Free Trade Agreement beneficiary when it is re-imported into Canada, but the GST or HST will apply.

You can make emergency repairs to your vehicle, vessel or aircraft while you are travelling outside the country to ensure your safe return to Canada, but make sure you declare the value of the repairs and replacement parts when you return to Canada with the vehicle.

Transport Canada also has requirements for vehicles that are extensively modified. For more information, contact Transport Canada's Registrar of Imported Vehicles at 1-888-848-8240.

[ausnp84]

Meh, it’s up to HMRC to prove you’ve been out of the country longer than three years, and the boat owner to be honest.

Having a friendly boat yard mechanic (or friend in general) write a receipt for work done to your boat in the past 24 months, or a fuel receipt, or anything really, will make the tax man’s life a lot more difficult as well.

It’s a ludicrously ridiculous rule but easy enough to work around.

N

[goboatingnow]

Originally Posted by ausnp84

Meh, it’s up to HMRC to prove you’ve been out of the country longer than three years, and the boat owner to be honest.



Having a friendly boat yard mechanic (or friend in general) write a receipt for work done to your boat in the past 24 months, or a fuel receipt, or anything really, will make the tax man’s life a lot more difficult as well.



It’s a ludicrously ridiculous rule but easy enough to work around.



N

Actually HMRC /customs is unique in that it can access you guilty and it’s up to you to prove your innocence.

Hence should HMRC form an opinion that the boat was out of the U.K. for three years it would simply issue a tax demand

It’s then up to you to prove them wrong , all the while the penalties for non payment accrue

[seandepagnier]

Originally Posted by RogerLloyd

I forgot to say the VAT is charged at 20% of value in the UK (and similar in EU). I do not know if the USA has this sort of purchase tax. (Of course, UK has a National Health Service to support, which I like.) I do not mind paying 20% at time of purchase, but I object to being charged VAT twice.

The question is: If I was an American and if I purchased a boat in America that was made in America, if I sailed that boat out of America for 3 years and then returned, would I be charged tax on the current value of the boat ?

i had to pay far more than the vessel value in taxes an fees from all the different countries. for example, new zealand charged 22% plus fees. On returning to the US, there were fees to register the boat which ended up being 15% of vessel value

In south pacific average fee was 10-15% of vessel value for check in per country. In a bunch of countries I talk the officials out of charging me. in caribbean it would cost 5% of vessel value just to check in and stay 30 days.

Why can't you pay 20% again? Why is it the rich always complaining when their taxes are unfairly much lower? The 20% tax should be 40%. at least you have health care.

[Jeannius]

Yet another 'benefit' of leaving the EU. While we were in the EU Returned Goods Relief was not time dependent. If you took the boat out you could bring it back. The RYA are trying to do something about this... https://www.rya.org.uk/news/rya-and-...f-grace-period but I wouldn't hold your breath.

Now, personally, I'd just leave without telling the authorities and come back without telling them.

[Sohum]

Originally Posted by Creedence

. here in Florida it’s about 6% up to a maximum of $18,000). Then there’s a registration fee of a couple hundred dollars. Get it documented with the Federal government for something like $80- free to renew thereafter.

You can take it anywhere you like as long as you like, you’ll owe nothing upon your return. Just keep paying your annual registration if necessary.

There’s no free renewal for Federally Documented vessels. It expires yearly, there is the option to pre pay 5 yrs. CA ask for either sales or use, can claim exempt. And to top things off,,,property tax.

[chasfgr]

Originally Posted by S/V Illusion

No. It’s a one time charge in the U.S.

And in the UK if you have the reciept showing either you paid the tax or bought the boat 2nd hand.


I'm afraid Mr Lloyd has been under the erroneous impression that buying a boat abroad with no VAT is a good way of bilking the government - unfortunately he'll have to pay in the end if he wants to use the boat in UK waters.
A word of relief - he'll only be liable for VAT on the current value of the boat - though he'll probably need expert (expensive) advice to counter the C&E assumption that boats keep their value.

[ausnp84]

Originally Posted by goboatingnow

Actually HMRC /customs is unique in that it can access you guilty and it’s up to you to prove your innocence.

Hence should HMRC form an opinion that the boat was out of the U.K. for three years it would simply issue a tax demand

It’s then up to you to prove them wrong , all the while the penalties for non payment accrue

True, but you have to do something rather thick to draw the ire of HMRC / they don’t just go after anyone (due to the internal cost of the investigation) and they need to justify the cost to themselves before going down this route.

I was self-employed for 15 years and the guidance for an investigation was that it would need to net HMRC >£100k in order to proceed. An accountant in the know has advised me that has since dropped to >£50k, and I suspect it’s less still for something as simple as boat importation.

What I’m getting at here is if you sail your Hurley 17 from Cherbourg to Hayling Island, you’re far less likely to get a tap on the shoulder than advertising for crew all over social to bring your brand new Hanse 55 into the Hamble....

[goboatingnow]

I agree , RTR was and isn’t an issue for boats in the U.K. or the EU, in practice

[ausnp84]

Originally Posted by seandepagnier

Why can't you pay 20% again? Why is it the rich always complaining when their taxes are unfairly much lower? The 20% tax should be 40%. at least you have health care.

Why should he / we have to pay 20% tax again? Not sure what you define as “rich”, but I think you’ll find the majority of boat owners certainly don’t meet the usual “rich” criteria.

VAT is paid on new vessels in the UK, and you’re inferring just because someone wishes to go sailing abroad on their vessel for a few years and then return, they should pay that tax (or double) again? Sorry, but that’s ridiculous.

N

[goboatingnow]

Why is it ! Ridiculous ! All taxes can be classed as “ ridiculous “
RTR ( returned goods relief ) is the tax law of the land.

At the end of the day all taxes are just that. A tax.

[ausnp84]

Originally Posted by goboatingnow

Why is it ! Ridiculous ! All taxes can be classed as “ ridiculous “
RTR ( returned goods relief ) is the tax law of the land.

At the end of the day all taxes are just that. A tax.

Some taxes have a purpose. Income tax funds social services, emergency services levy funds police / fire / ambulance, national insurance covers the NHS (free healthcare)... those taxes I understand. They’re collected across the board and fund the country and it’s operation. The initial charging of VAT / GST / sales tax I also understand, and is a tax for having the ability to purchase something.

Taxing a boat VAT a second time because it’s left the country to go sailing and then returned? That is a straight up cash grab.

N

[goboatingnow]

Originally Posted by ausnp84

Some taxes have a purpose. Income tax funds social services, emergency services levy funds police / fire / ambulance, national insurance covers the NHS (free healthcare)... those taxes I understand. They’re collected across the board and fund the country and it’s operation. The initial charging of VAT / GST / sales tax I also understand, and is a tax for having the ability to purchase something.



Taxing a boat VAT a second time because it’s left the country to go sailing and then returned? That is a straight up cash grab.



N

Vat is accounted for on

Sale
Purchase
Export
Import

The rules are goods returning after 3 years are imports = import tax = VAT

don’t like it. Write your MP

( note you can of course arrange a much longer RTR grace period on agreement beforehand with customs. , hence in reality nobody gets hit with RTR on a yacht )