UK boats could lose EU VAT paid status

[mikedefieslife]

Originally Posted by Dockhead

I have no idea.


However, I have just heard that EU boats owned by EU residents will ALSO lose their Union goods status, if they are in UK waters on Brexit day.


Scary stuff!


And now, four days before the date, we STILL don't know whether it's going to happen or not.


I did not sail to France over the weekend, feeling certain optimism that there would be an extension, but now I'm wondering whether I made the right decision. I have to fly out tomorrow on business and it will be hella difficult for me to get back to get the boat out of here in time, in case this extension doesn't materialize

What happens if you're international waters at 11pm on 12th April? do you then lose UK and EU tax paid status? Or does the country you are resident in have some kind of returning goods waiver?

[Dockhead]

Originally Posted by mikedefieslife

What happens if you're international waters at 11pm on 12th April? do you then lose UK and EU tax paid status? Or does the country you are resident in have some kind of returning goods waiver?

Hell of a question. I have no idea.


The EU has a returning goods program, but it is not clear to me whether it can be used by non-residents. The UK returning goods program doesn't exist as far as I know -- as of today, the EU program is valid in the UK. The day after Brexit, I don't know.

[Chantal]

OK, If your boat is UK registered, and you as the owner paid VAT in the UK prior to Brexit, even if your boat is in EU waters, you will be able to return her to the UK and as the owner you can claim relief against paying VAT again. This relief is only eligible for the person who paid VAT in the UK in the first place, so if you sell her, gift her or pass her own via inheritance, the new owner will NOT get this relief and will have to pay VAT again on her when bring her back to UK waters, based on her value at the time of re-import.

If the boat is UK registered but in international waters, she will retain UK status and the benefit of the above relief. she will LOSE Union Status.

Yes the EU has a returning goods policy for EU residents, but you needed to have paid VAT in the EU in the first place. As the EU . It is arguable that paying UK VAT prior to the leaving the UK should count as EU VAT, but the letter from the EU that I posted earlier refers to values in euros not GBP so I personally wouldn't want to rely on that argument!

In essence if you want to sail a British registered yacht in European waters without any time limits, she MUST be in European waters on Brexit day, provable by images off your AIS if you have one, marina receipts, clearing in/out papers if you can get them...

Good Luck, and here's hoping that on the 10th the EU vote for an extension to the 12th otherwise it is a made dash from Turkey to Greece for us!!

[Kenomac]

Regarding VAT issues in the EU and the UK, we've always played things very safe on our boat by not leaving things to the last minute. Generally, we like to have a couple of months worth of cushion on the VAT/IVA timetable. It's not a matter we'd like to loose sleep over.

I can't believe some of you are leaving this important stuff to the final day.

[Rapanui]

There has been a lot of confusion expressed in this thread about the situation regarding yacht EU VAT status, so I have quoted the latest CA information based on information supplied by the EU Commission and UK HMRC. Important points I draw are:

• It is only a 'UK boat' whatever that is but I read to be that owned by a UK Citizen which would lose EU VAT status if located in the UK on Brexit day. So any other non-UK boat would not lose EU VAT status for being in UK on Brexit day.
• UK owned boats will not lose UK VAT status wherever they are on Brexit day.
• The CA elsewhere, strongly advise UK boats to get a T2L which is an EU document issued by HMRC as proof of 'Union goods status' e.g. its EU VAT status before Brexit day (as presumably afterwards the UK will not be able to issue one). All EU countries must accept a properly endorsed T2L as evidence of status. The CA provides a lot of help and blank forms to members in completing it and ours came back stamped within a week from HMRC. Worth joining CA just for this! HMRC seem completely relaxed about this, no doubt they have bigger fish to fry.

Overview
Following Brexit, yacht cruisers in Europe will need to be much more aware of the VAT implications of their cruising activities. Once Brexit occurs – either on a "no-deal" Brexit or at the end of a transaction period -there will be separation of the UK and EU VAT regimes. Yacht cruisers sailing between the UK and the EU will then to be aware of and take account of these new VAT issues.
In addition yacht cruisers will need to be aware that Visa free stays in the Schengen Area will be limited to 90 days in ANY 180 day period and that if either a single trip or a combination of trips will be more than 90 days then an extended visa may be required BEFORE leaving home.
VAT on Vessels
The EU Approach
The EU Commission has stated that customs status of a UK boat will depend on its location on the Brexit day. If on the Brexit day a boat is located in an EU port or sails in EU territorial waters, it will keep its Union status and continue to be regarded as having VAT-paid status. If the boat is located in the UK on the Brexit day, its status will be that of a third-country boat when arriving in the territorial waters of the Union, i.e. it will be treated as non-Union goods. Following Brexit Customs controls for such UK boats will be the same as for boats coming from any other non-EU country.
Following Brexit, yachts without EU VAT-paid status will be able to visit the EU under a "Temporary Importation" scheme without paying VAT. In general, this allows non-EU yachts to sail in EU waters for up to 18 months (extendable up to 24 months if the yacht is laid up and not used), for private purposes, as long as the yacht is owned by a non-EU resident. The Temporary Importation scheme can be re-started by leaving EU waters (even for a few days).
The UK Approach
HMRC has stated that "UK owned boats will retain their UK VAT paid status whatever their location on the day the UK exits the EU".
HMRC has also said Returned Goods Relief (RGR) will be available to allow those resident in the UK to return with their belongings (including pleasure boats) to the UK without paying customs duty or VAT as long as the items have not been changed since their departure and the importer follows HMRC guidance. This requires that "the person responsible has evidence that the VAT was paid on the purchase of the boat in either the UK or the EU". There does not appear to be any time limit on the availability of this relief as long as the yacht is used for private purposes.
For yachts that are purchased post-Brexit "VAT accounted for in the UK would need to be shown in respect of vessels purchased after the date of the EU exit".

[Chantal]

[QUOTE=Rapanui;2866615]There has been a lot of confusion expressed in this thread about the situation regarding yacht EU VAT status, so I have quoted the latest CA information based on information supplied by the EU Commission and UK HMRC. Important points I draw are:

• It is only a 'UK boat' whatever that is but I read to be that owned by a UK Citizen which would lose EU VAT status if located in the UK on Brexit day. So any other non-UK boat would not lose EU VAT status for being in UK on Brexit day.
• UK owned boats will not lose UK VAT status wherever they are on Brexit day.
• The CA elsewhere, strongly advise UK boats to get a T2L which is an EU document issued by HMRC as proof of 'Union goods status' e.g. its EU VAT status before Brexit day (as presumably afterwards the UK will not be able to issue one). All EU countries must accept a properly endorsed T2L as evidence of status. The CA provides a lot of help and blank forms to members in completing it and ours came back stamped within a week from HMRC. Worth joining CA just for this! HMRC seem completely relaxed about this, no doubt they have bigger fish to fry.

I am sorry but I think the above is misleading. The response I have received from the EDCC specifically states "The customs status of a UK boat will depend on its location at that point in time: if the boat is located in an EU port or sails in EU territorial waters, it will keep its Union status; if the boat is located in the UK (or elsewhere), its status will be that of a third-country boat when arriving in the territorial waters of the Union, i.e. it will be treated as non-Union goods.

So to rely on the T2L and the CA's comments is in my view very high risk... and lets be frank here, no doubt the CA will have a waiver on their website somewhere so you wont be able to sue if the T2L is not accepted by the EU as evidence of Union Status and you incur EU VAT when you outstay your welcome there! (18months)

[Rapanui]

In response to Chantal's correction, I made no assertion regarding UK boats outside EU or UK, the CA did not include the case of UK boats in third countries. Chantal has provided another piece of a complex jigsaw.


With regard to the T2L, of course having one will not protect boats from the decision to withdraw Union status if located in UK on Brexit day, but alongside evidence of being located in the EU on Brexit day should ensure that officials will accept the boat having Union status. The T2L is a well established means of proving Union status for all manner of goods, and in fact some countries insist upon seeing one rather than original VAT receipts. It is not a lot of hassle to get one and I think a worthwhile precaution.

[Chantal]

Originally Posted by Rapanui

In response to Chantal's correction, I made no assertion regarding UK boats outside EU or UK, the CA did not include the case of UK boats in third countries. Chantal has provided another piece of a complex jigsaw.


With regard to the T2L, of course having one will not protect boats from the decision to withdraw Union status if located in UK on Brexit day, but alongside evidence of being located in the EU on Brexit day should ensure that officials will accept the boat having Union status. The T2L is a well established means of proving Union status for all manner of goods, and in fact some countries insist upon seeing one rather than original VAT receipts. It is not a lot of hassle to get one and I think a worthwhile precaution.

Totally Agree, In essence, we, if the 12th isn't postponed tomorrow, intend to have our yacht sailed over from Turkey to and cleared into Greece on the 11th, so we will have a stamp on our Greek Cruising log, the marina invoice, a copy of our AIS screen showing our location AND our T2L!. a bit belt and braces, but better that than a potential €20,000 EU VAT bill to pay at some point!.

Here's hoping the 12th is postponed!!

[Dockhead]

Originally Posted by Kenomac

Regarding VAT issues in the EU and the UK, we've always played things very safe on our boat by not leaving things to the last minute. Generally, we like to have a couple of months worth of cushion on the VAT/IVA timetable. It's not a matter we'd like to loose sleep over.

I can't believe some of you are leaving this important stuff to the final day.

No one has any choice -- no one knows when or even if Brexit will occur!

[GTom]

Originally Posted by Rapanui

With regard to the T2L, of course having one will not protect boats from the decision to withdraw Union status if located in UK on Brexit day, but alongside evidence of being located in the EU on Brexit day should ensure that officials will accept the boat having Union status. The T2L is a well established means of proving Union status for all manner of goods, and in fact some countries insist upon seeing one rather than original VAT receipts. It is not a lot of hassle to get one and I think a worthwhile precaution.

An EU boat can sail 3 years outside the EU VAT area. Why would this event different? Paid VAT in EU-territory (UK), territory moved away from the boat: if I want to keep the status, should follow the territory within 3 years... Logical and I think legally defendable.

Originally Posted by Dockhead

No one has any choice -- no one knows when or even if Brexit will occur!

And there is that too! Give it a 50% that it won't even happen at all...

[Dockhead]

So it's been delayed to October, unless the UK pull something out earlier. At any rate, it doesn't happen tomorrow. My gamble to leave the UK without sailing her across to C-bourg paid off.

[Dockhead]

Originally Posted by GTom

An EU boat can sail 3 years outside the EU VAT area. Why would this event different? Paid VAT in EU-territory (UK), territory moved away from the boat: if I want to keep the status, should follow the territory within 3 years... Logical and I think legally defendable....

Logical indeed, but unfortunately that's not the way it works.


You will be deemed to have exported the boat, if she is in the UK on Brexit day. There is official advice on this.


Brexit is now delayed, but probably only delayed, so everyone who is affected by this issue should be careful and be ready to be in the right place on Brexit day. The physical location of the boat on that very day, is what determines where the boat is deemed to be VAT and customs duties paid.

[GTom]

Originally Posted by Dockhead

Logical indeed, but unfortunately that's not the way it works.


You will be deemed to have exported the boat, if she is in the UK on Brexit day. There is official advice on this.


Brexit is now delayed, but probably only delayed, so everyone who is affected by this issue should be careful and be ready to be in the right place on Brexit day. The physical location of the boat on that very day, is what determines where the boat is deemed to be VAT and customs duties paid.

At least we got some time to figure what to do. Afraid France will be full by October, quite obviously we want to keep "both" VAT paid status...

[Dockhead]

Originally Posted by GTom

At least we got some time to figure what to do. Afraid France will be full by October, quite obviously we want to keep "both" VAT paid status...

Yes, thank God we get more time. That we found out we got more time only 24 hours before the date is of course ridiculous.


I would also like to keep VAT paid status in BOTH UK and EU, but as far as I understand, you get one or the other, unless there is some special legislation.


I am not a UK resident and don't plan to become one, so losing UK VAT paid status would not be a problem for me. Therefore I am concentrating on not losing EU status, which WOULD be a problem for me, and a big one.



Also, with a UK boat based in the UK, it would be basically impossible to prove that you lost UK VAT status, unless you are forced to make a declaration WHICH status you have (and for UK residents you should be able to use the RGR to get UK status back, if you have to, at least within 3 years). So I think a quick trip to C-bourg would be a good solution for most people -- the marina receipt is proof for the Europeans. For me, for sure.

[Alita49DS]

This is the latest on the subject from the RYA - received this afternoon, 11/04/2019: -

https://www.rya.org.uk/newsevents/e-...m_medium=email