HMRC U-turn on tax on returning boats

[Chris_Robb]

Watches the RYA webiner,kept losing the volume, so didn't get it all .
Three thing come out of it
1 ... it seen HMC have said the boats returning back to the UK up to Dec 2021 will be able to claim RGR .( RYA still working on getting it to three years )
2.. as I and may other have been saying the TR2 is no prove VAT has been paid .
3 .. some country may not recognise the ICC if the boat flag isn't within the country that skipper is from .
In other words if you reflag your boat to say Greece or Spain then , Spain or Greece MAY not except the ICC .
but say your flag is British and your a British resident then your OK .
The rest was all basically no one know as yet ,
RYA members can write in with question .

If I understand correctly - HMRC are saying they will enforce RTR rigorously but that doesn't necessarily follow that the time extension allowed in current rules won't still apply for those who personally took their boats out of the UK and return them. The change appears to be the date at which the export took place.

I does however appear that anyone who has bought a boat in the EU will not be able to claim UK RTR unless they have in the meantime already been back to the UK with it. I don't understand how they can change the law retrospectively as the UK and EU were (still are until 31/12) one territory with goods in free movement, when the boat was purchased.

For those of us who have no intention of returning our boats to the UK, I don't see any problems and we may even find our boats are worth more in a larger market with EU VAT paid status. But, what will happen to UK residents with a boat purchased and based in EU, if they visit the UK? Will they be able to use temporary import rules or, be nailed for import duties/VAT?

 

[Chris_Robb]

Graham - I have a feeling that everyone is barking up the wrong tree. HMRC has talked yesterday about allow another year to the 3 years return. However no one in the RYA seems to mention the real issue : That of coming back later than 3 years, which is there in black and white in the regulations (see attached 9.3)

I cannot see in 100 years how the date of export will be anything other than 1st Jan 2021. Think of the knock on effect of UK residents who bought a UK boat 4 years ago on the EU - its not a case of being fair its downright crooked. Thats why I think every one in barking up the wrong tree!





Look in 9.3 above - It says it all.

 

[Graham376]

Graham - I have a feeling that everyone is barking up the wrong tree. HMRC has talked yesterday about allow another year to the 3 years return. However no one in the RYA seems to mention the real issue : That of coming back later than 3 years, which is there in black and white in the regulations (see attached 9.3)

I cannot see in 100 years how the date of export will be anything other than 1st Jan 2021. Think of the knock on effect of UK residents who bought a UK boat 4 years ago on the EU - its not a case of being fair its downright crooked. Thats why I think every one in barking up the wrong tree!

Look in 9.3 above - It says it all.

What I heard recently is that HMRC are saying our boats have already been exported but, I agree with you that 31/12 should be the date, when we leave the Customs Union transition period. We've been out of UK for about 14 years and the potential problem with RGR is that an extension "may" be allowed, not "will" be. Are they planning the same with caravans, camper vans and cars? Anyway, I'm not planning on bringing the boat back so not personally worried.

 

[Graham376]

Received from my MP (David Jones) this morning 16th Oct.

Thank you for your e-mail.
I understand your frustration with this situation. My colleagues at the Treasury
will soon be meeting with representatives of the Royal Yachting Association
(RYA) and British Marine to discuss this issue. RYA and British Marine have
worked hard to address issues relating to our departure from the European
Union and have continued to meet regularly with Ministers from various
Departments to discuss key industry issues and provide advice to their
members.
More broadly, the UK is leaving the EU’s customs union at the end of the
transition period on 31 December. This will occur regardless of whether an
agreement on a future relationship is reached with the EU. There will necessarily
be changes to customs procedures, but it is important that these are
communicated clearly and in good time.
Thank you once again for writing to me.
Kind regards.

 

[sailaboutvic]

Received from my MP (David Jones) this morning 16th Oct.

Thank you for your e-mail.
I understand your frustration with this situation. My colleagues at the Treasury
will soon be meeting with representatives of the Royal Yachting Association
(RYA) and British Marine to discuss this issue. RYA and British Marine have
worked hard to address issues relating to our departure from the European
Union and have continued to meet regularly with Ministers from various
Departments to discuss key industry issues and provide advice to their
members.
More broadly, the UK is leaving the EU’s customs union at the end of the
transition period on 31 December. This will occur regardless of whether an
agreement on a future relationship is reached with the EU. There will necessarily
be changes to customs procedures, but it is important that these are
communicated clearly and in good time.
Thank you once again for writing to me.
Kind regards.

Nice of him to reply to tell you nothing we didn't know .
So we still no wiser

 

[Baggywrinkle]

I honestly also can't see the date of export as being anything other than 01.01.2021 ...

Legally, on 31.12.2021 the boat was in a customs union to which the UK was party and chances are that the boat owner can prove that.
The Inland Revenue would be unable to prove or disprove any other export date.
There would be no export/import paperwork anywhere for the vessel.

A legal challenge to the Inland Revenue where the boat owner claims that the export date was 01.01.2021 due to the UK leaving the common customs area would IMO be an unassailable argument.

The government are setting themselves up for an impossible task IMO if they try and use any date other than the 01.01.2021.

 

[Graham376]

A legal challenge to the Inland Revenue where the boat owner claims that the export date was 01.01.2021 due to the UK leaving the common customs area would IMO be an unassailable argument.

I agree but unfortunately, bringing such a case would be far more expensive than paying the VAT for most of us.

 

[Baggywrinkle]

I agree but unfortunately, bringing such a case would be far more expensive than paying the VAT for most of us.

Once one challenge has succeeded then the government would normally fold on the rest IMO - it is not in their interest to continue fighting once defeated in court, and as you say, the VAT sums involved for most boaters are simply not worth the expense to try and collect - especially with a high risk of failure and a precedent already set.

It might be worth taking out legal protection insurance just in case?

 

[sailaboutvic]

Came across this .which seen to say what I been trying to say , which is because a boat have changed hands within the EU it can still be taken back to ones country without VAT being incurred.
"
Can a boat lose its VAT paid status?
If a yacht with VAT paid status is exported from the EU it will usually qualify for relief from having to pay VAT again if it is imported back into the EU within 3 years of its export, provided that it is imported by the same person who exported it, i.e. no change of owner whilst outside the EU. However, this will not exempt it from any customs duties that maybe apply. If your boat will be exported for more than 3 years you should check the position with custom "

 

[Mistroma]

I see that the Financial Times have an article on the front page confirming that HMRC will grant an extension to give boats an extra year to avoid paying VAT again. Their interpretation seems to be that boats in EU for 3 years on 31st December 2020 will now have until 31st December 2021 to return without paying extra tax.

I guess that this clarifies the ambiguity mentioned by the RYA and HMRC are not taking it as 3 years from 31st December 2021. I doubt that this is guaranteed to be completely correct as it depends on the quality of journalism.

I noted that the article concludes by saying that there may be a double whammy at the EU end if UK registered yachts remain in the EU as member states seek quick wins in getting extra cash. VAT director at accountants Hillier Hopkins said "leaving a vessel in EU waters could also cause tax liabilities because VAT paid status only applies to EU flagged craft." This is completely at odds with RYA's statement from Barnier's office regarding VAT paid boats already in the EU at the end of 2020.

 

[sailaboutvic]

Someone pass me a rope to hang myself .

 

[Irish Rover]

VAT director at accountants Hillier Hopkins said "leaving a vessel in EU waters could also cause tax liabilities because VAT paid status only applies to EU flagged craft." This is completely at odds with RYA's statement from Barnier's office regarding VAT paid boats already in the EU at the end of 2020.

Absolute bollox. VAT status has nothing to do with the flag state, as we all know, so best to ignore this FT article completely.

 

[Mistroma]

Absolute bollox. VAT status has nothing to do with the flag state, as we all know, so best to ignore this FT article completely.

Agreed, I meant to mention that I'm going to point out the article to RYA. I imagine a lot of people will see the FT article and think that the information is correct.

 

[Beneteau381]

GTOM - the exact wording is if your vessel is in the UK Customs zone on 31st December it becomes UK Vat Paid goods. This then says - which has been confirmed , is that if you are anywhere else in the world - say Turkey, you have 3 years exemption on returning, from the date you left the EU Customs zone. So if you left on May 2018 and come back bu May 2021, you will still have EU VAT and UK VAT by you right of exemption. So you dont per se have to be IN the EU to retain it. The worry I have is that the Greeks will not brief their customs guys and they invent their own rules, which will differ by where you go to check in! Hence I would prefer to be in the EU at that date.

There are still a number of points to get confirmation, but they are fringe - both from the EU and HMRC.

Subscribe to read | Financial Times

 

[Beneteau381]

Absolute bollox. VAT status has nothing to do with the flag state, as we all know, so best to ignore this FT article completely.

Beat me to it, however dont forget that the FT is a remain supporting paper

 

[Graham376]

That article won't generate much sympathy by quoting a £250K boat, the great unwashed know we're rich barstewards so serves us right!

 

[syvictoria]

That article won't generate much sympathy by quoting a £250K boat, the great unwashed know we're rich barstewards so serves us right!

^ This was essentially the response on Press Preview on Sky News last night where they very briefly mentioned the FT article! Not Sky's finest moment in journalism.

 

[Irish Rover]

That article won't generate much sympathy by quoting a £250K boat, the great unwashed know we're rich barstewards so serves us right!

I don't think anyone is looking for sympathy or expecting it. People are just asking for fair play and getting that shouldn't be dependent on your economic circumstances. I don't think there would be a huge difference between the number of returning boats whether it's one year or three so it's hard to see what HMRC are trying to achieve.

 

[Graham376]

I don't think anyone is looking for sympathy or expecting it. People are just asking for fair play and getting that shouldn't be dependent on your economic circumstances.

Public opinion often leads to changes. If they were saying that VAT would be payable on returning caravans or cars, then Mr.Average could relate to that and see it as unfair.

 

[Beneteau381]

Public opinion often leads to changes. If they were saying that VAT would be payable on returning caravans or cars, then Mr.Average could relate to that and see it as unfair.

I suspect our contacting our MPs and giving them a heads up soon got HMRC attention, dont forget, David Jones used to be the Brexit Minister and is a barrister. Ive known him a long time, clever straight shooter.