Buying a boat from the EU and Brexit Transition date (re:VAT)

[Nito]

Hello folks,

Sorry to bring up the B word. We're considering purchasing a boat from the EU. With the Brexit transition date looming and preparing for a worst case scenario so to speak, if one were to buy a boat prior to the transition 31.12.20, one would assume no Vat would be due.

But reading around the various sources, would it be correct to say the boat would have to physically be in the UK prior to the 31st December? In which case, the technicalities of getting the purchase and invoice done, boat physically brought in (and UK registered?) may come into play!

When one buys a boat from the EU, how is it registered in the UK? I read about the UK ship register 'part 1' and the lighter part 3 SSR. It seems that the Part 3 is just to add the boat to the register to prove nationality but doesn't verify ownership as a part 1 would. Would I have to go for a part1 (which would include a tonnage check) to get official ownership 'papers'? What has anyone else done who has purchased/brought a boat in from the EU?

If the boat was purchased before the deadline and invoiced but sat in the EU, I guess it could become liable to 20% vat?!

I'm tempted to wait it out and see what actually happens post 31st December than rush in now, but if 20% vat becomes payable than the boat in question would have to be ruled out!

Any help or advice appreciated...

Thanks
Nito

 

[ontheplane]

My understanding is that there is some question over it all - others know more than me.

Surely if the boat is 2nd hand, then as long as it's VAT paid in EU, at the point the "event" occurred i.e. it was bought and the VAT was paid, we were still IN the EU.

Therefore if a boat is sold new in 2021 then it won't be VAT paid when you try to import it - but if it was a 2019 boat, the "European VAT" was paid and we were in EU at that time......


However that would be logic, and as we all know - politics and logic do not mix.

 

[Nito]

Exactly! I agree with you on the principle, that said, I was looking at importing a motorcycle from the EU, it had 100 miles on the clock, under rules from my research, it was classed as NMT (new means of transport - if less than 6k iirc miles or 6 months old despite being over 10 years old!). If you can't demonstrate VAT paid (original sales invoice) and even then, who is to say that a previous owner hasn't reclaimed the vat?!

If you buy something from Japan for example, regardless of local taxes paid, you are hit with duty and vat. Would a Euro purchase have the same applied, or not if it came from EU before transition because we were all part of the same tax regime?

The true answer is probably no one knows yet. I read the threads about UK owners who should bring their boats back in before the 31st and then take back out so that at the point of the transition they are in UK waters. Would be crazy if that were the case.

 

[st599]

My understanding is that there is some question over it all - others know more than me.

Surely if the boat is 2nd hand, then as long as it's VAT paid in EU, at the point the "event" occurred i.e. it was bought and the VAT was paid, we were still IN the EU.

Therefore if a boat is sold new in 2021 then it won't be VAT paid when you try to import it - but if it was a 2019 boat, the "European VAT" was paid and we were in EU at that time......


However that would be logic, and as we all know - politics and logic do not mix.

No
The VAT status of the boat is dependent on where it is on the 31st December. In your example, it would be EU VAT paid, but not UK VAT paid. You may be able o temporarily import it (if you meet the rules), but otherwise you'd owe VAT and Import Duty.
The RYA has a very comprehensive guide to the rules on the website.

 

[Greg2]

Where our boats are on the 31st Dec appears to really matter, even those of us in the U.K.

This was posted on the Sealine Forum:

I've just had a helpful email from the boatyard where I'm currently lying. It quotes the RYA guidance on the issue of vessel location and Brexit.

- Boat lying in Great Britain at 11pm UTC on 31 December 2020
When the transition period ends Great Britain will no longer be part of the Customs Territory of the EU. Please see the note further down the page regarding Northern Ireland.

Recreational boats lying in GB at the time the transition period ends will cease to be in free circulation in the Customs Territory of the EU. They will no longer have Union status and will be treated by the UK as ‘domestic goods’.

In order to evidence this status of ‘domestic goods’ in the future the owner will need to continue to retain evidence of the boat’s VAT paid status and must also obtain and keep evidence to demonstrate the boat’s location at the end of the transition period.

See the RYA site for further info: Brexit - what happens next? | Current Affairs | Knowledge & Advice | RYA - Royal Yachting Association

 

[dunedin]

Nito, as st599 says, read the RYA website very carefully, and be selective about listening to people on here.

Key question 1 is where are you resident (U.K., EU27 or somewhere else)?
Key question 2 is where you want to use any future boat - full time in the EU (eg in the Med), in the U.K., go blue water etc.

There are a number of serious (and expensive) gotchas that Brexit will cause for boat owners.

From the RYA advice, the ideal would be buy sufficiently before 31/12/2020, whizz it back to the U.K. then back to the EU before 31/12/2020. Then back to the U.K. from 1/1/2021.
If you manage all that you might manage to have both EU and U.K. VAT status (though some debate on that, and lots of ways to subsequently lose one or both).
But to manage that would probably need miracles starting from now.And of course Covid-19 probably prevents crossing the various borders anyway.

And be very careful not to be a U.K. resident wanting to bring back a new to you boat to the U.K. (even for a brief visit) which was bought in the EU (and which was never in the U.K. under YOUR ownership). You might discover U.K. TI is not available for U.K. residents (if you don’t know what TI means, then be doubly careful.). As you are paying 20% VAT on the boat for the second time, you can toast our Brexiteers who got us into this mess.

Of course this is just a forum poster’s views which may be entirely wrong, so check the RYA site and get professional VAT advice before making any significant investment

 

[st599]

Nito, as st599 says, read the RYA website very carefully, and be selective about listening to people on here.

Key question 1 is where are you resident (U.K., EU27 or somewhere else)?
Key question 2 is where you want to use any future boat - full time in the EU (eg in the Med), in the U.K., go blue water etc.

There are a number of serious (and expensive) gotchas that Brexit will cause for boat owners.

From the RYA advice, the ideal would be buy sufficiently before 31/12/2020, whizz it back to the U.K. then back to the EU before 31/12/2020. Then back to the U.K. from 1/1/2021.
If you manage all that you might manage to have both EU and U.K. VAT status (though some debate on that, and lots of ways to subsequently lose one or both).
But to manage that would probably need miracles starting from now.

And be very careful not to be a U.K. resident wanting to bring back a new to you boat to the U.K. (even for a brief visit) which was bought in the EU (and which was never in the U.K. under YOUR ownership). You might discover U.K. TI is not available for U.K. residents (if you don’t know what TI means, then be doubly careful.). As you are paying 20% VAT on the boat for the second time, you can toast our Brexiteers who got us into this mess.

Of course this is just a forum poster’s views which may be entirely wrong, so check the RYA site and get professional VAT advice before making any significant investment

Also note, if you are an EU citizen, you can not temporarily import a non-EU boat to the EU.

 

[DavidJ]

You might discover U.K. TI is not available for U.K. residents (if you don’t know what TI means, then be doubly careful.).

OK give up
what is TI?

Ah! just got it “Temporary Import”

 

[Nito]

Thanks for the input and advice chaps,

I'm a UK resident who will want to use in the UK.

EU Vat should always be ok on it as it is currently vat paid in EU and sitting in EU. So it looks like I would need to have it surveyed, purchased and transported before the 31st with Covid and Xmas challenges!

I have both surveyor and transport companies lined up but it's all cutting it very fine, for example any delay out of my control with the getting the boat back over the channel on the transporter would be a major issue. I know it could be sailed but it has no radar and it's not the kind of voyage I'd want to undertake with a new to me boat on her maiden voyage with me!

 

[st599]

EU Vat should always be ok on it as it is currently vat paid in EU and sitting in EU.

Once you remove it from the EU, after a time it will lose its EU VAT Paid status.

 

[dunedin]

Thanks for the input and advice chaps,

I'm a UK resident who will want to use in the UK.

EU Vat should always be ok on it as it is currently vat paid in EU and sitting in EU. So it looks like I would need to have it surveyed, purchased and transported before the 31st with Covid and Xmas challenges!

I have both surveyor and transport companies lined up but it's all cutting it very fine, for example any delay out of my control with the getting the boat back over the channel on the transporter would be a major issue. I know it could be sailed but it has no radar and it's not the kind of voyage I'd want to undertake with a new to me boat on her maiden voyage with me!

If you buy pre-31/12/20 in the EU and then bring back to U.K. before then you should be OK for U.K. VAT Status

But you will lose the EU VAT status if sitting in U.K. on 31/12/2020. AFAIK the only way to retain both would be to do a 3 way shuffle as per post #6.
However, this is probably not a huge issue if you only plan to go to the EU for short periods, as being Non-EU resident you can do Temporary Import for up to 18 months.

All the above may be wrong. Check with RYA and get specialists involved if a major purpose, as I am no expert.

 

[Deleted User YDKXO]

This might help a bit

 

[kashurst]

What would constitute proof of a boats location?

 

[DavidJ]

What would constitute proof of a boats location?

A letter from the marina confirming location 31st December 2020

I have today actually asked for this confirmation from my marina in Spain to be written, of course, in the new year.

 

[Deleted User YDKXO]

What would constitute proof of a boats location?

Another forumite has kindly arranged for his boat and my boat to be inspected by a local French lawyor who will provide a document confirming that the boats were in France on 31 Dec

Even though the Ward & McKenzie document suggests getting proof of location for UK registered/UK based boats, personally I think thats over the top but for UK registered boats based in the EU, I think its probably a good idea

 

[Nito]

This might help a bit

Thank you very much for this, seems the clearest piece of advice out there...looks like I would fall into either 1 (if boat in UK) or 5b (If lying in EU on transition date), with 5b saying there is uncertainty as to whether RGR would be applicable at the moment!

Thanks to all the other contributors also, some very helpful posts.

Cheers
Nito

 

[Hurricane]

What would constitute proof of a boats location?

In Sant Carles, we are arranging for the marina to issue us with a certificate stating that the relevant boat was in the marina on the night of the 31st December 2020.
As a group of Brits in Sant Carles, we are also arranging photographic evidence (of individual boats and webcam images) to be taken at that time.
The photos will then be published on our marina forum.
The forum, being in the public domain, I believe will also provide a level of proof.
I have also written some software that "visually burns" the date that the image was taken into the photo.
All a bit extreme but I believe it would be hard to disprove this photo and marina certificate evidence.

 

[Hurricane]

OK give up
what is TI?

Ah! just got it “Temporary Import”

It isn't strictly called TI
The correct name is TA
I always try to look at the logic of why these regulations exist.
Think about it - if you wanted to take a caravan on holiday through Europe, you wouldn't expect to have to "import" it into the EU.
So, you would be using the TA (Temporary Admission) rules.
Likewise, you wouldn't expect a ship delivering goods to be imported into the EU whilst it was shipping goods around the world.

 

[Portofino]

Mines still has the decal ghosts marks on the blue hull .I have a copy of the old Italian blue book reg doc anyhow .
Plus its never left the EU .
Gardia Finanza paid pontoon visit last July , we only had a chat they were mainly interested in the Italian boats under a red ensign . Apparently they are “ owned “ by a U.K. bank hence the flags .
So I think there will plenty of local fish to fry so to speak .
If you immediately seem Eng on a red flagged boat they loose interest and move to the next .
It unlikely they will “do you “ on the premise next summer that you have sailed from the U.K. .
Out at anchor ( been done 5 x in 15 years ) the first thing they ask is where you are from , the home port .
So if you just accurately answer that I can not see them initially perusing evidence there n then ...threading or otherwise doing you for VAT .In court the onus is on them to prove you came “yesterday “from the U.K. .
How can they ?
Having said all this for me we have CCTV , so as a backstop I will be redoing this pic .on the 31 st .
Belt n Braces

Note The big Pershing come back in the foreground.

 

[Hooligan]

Thanks for the input and advice chaps,

I'm a UK resident who will want to use in the UK.

EU Vat should always be ok on it as it is currently vat paid in EU and sitting in EU. So it looks like I would need to have it surveyed, purchased and transported before the 31st with Covid and Xmas challenges!

I have both surveyor and transport companies lined up but it's all cutting it very fine, for example any delay out of my control with the getting the boat back over the channel on the transporter would be a major issue. I know it could be sailed but it has no radar and it's not the kind of voyage I'd want to undertake with a new to me boat on her maiden voyage with me!

I have just done the reverse. Bought boat in UK and shipped to the EU where I use it. It is UK VAT paid. All other things being equal ie money grabs against UK flagged boats in the EU, the boat qualifies as VAT paid for EU purposes. It would also in my understanding be possible to repatriate the boat within 3 years under the re import rule And still be considered UK VAT paid. there are some conditions around this. However you are correct. You need to have your boat back in the UK by end December I believe. Good luck.