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VAT post Brexit

jimcairns52

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17 Oct 2020
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1
Following today's report in the Financial Times regarding VAT liability post Brexit, I would be interested in other sailors' viewpoints.
I've kept my X Yacht Xc45 Priceless in Palma, Mallorca since purchasing it new in Denmark in 2012. Priceless is UK registered (SSR) and VAT paid. It seems that I have until December 2021 to bring it back to the UK to avoid being charged VAT again. It also appears that if I keep it in Palma, I may be charged VAT by the Spanish authorities.
If I bring her back to the UK I could be charged VAT when I head back to the warmer waters of the Med,
Either way, Boris seems to be going to land me with a potentially expensive tax bill.
Does anyone else feel confused and scuppered?
Jim Cairns
 

Scala

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Joined
21 Feb 2004
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3,872
Location
Home: Saffron Walden. Boat: Swanwick
Following today's report in the Financial Times regarding VAT liability post Brexit, I would be interested in other sailors' viewpoints.
I've kept my X Yacht Xc45 Priceless in Palma, Mallorca since purchasing it new in Denmark in 2012. Priceless is UK registered (SSR) and VAT paid. It seems that I have until December 2021 to bring it back to the UK to avoid being charged VAT again. It also appears that if I keep it in Palma, I may be charged VAT by the Spanish authorities.
If I bring her back to the UK I could be charged VAT when I head back to the warmer waters of the Med,
Either way, Boris seems to be going to land me with a potentially expensive tax bill.
Does anyone else feel confused and scuppered?
Jim Cairns
Is that VAT Paid in Denmark? I assume so from what you've said - In that case AFAIK it's EU VAT Paid now, and will remain so if you leave it in Palma. Why would the Spanish charge VAT again in this particular case? Your problem with HMRC wanting to charge you UK VAT might arise if you bring the boat back to the UK permanently, or if you want to sell it here, at any time after the transition period.

However, if you bought it from a dealer with a UK VAT number and took delivery in Denmark, and your new sales invoice shows UK VAT, then it's UK VAT Paid so in that case I think you're right.

This is a minefield. The RYA is trying to keep on top if it. Might be worth joining if not already a member so you can access their legal support.
 

Norman_E

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Joined
15 Mar 2005
Messages
22,503
Location
East Sussex.
+1

Look at Liveabord forum, don't believe everything you read in the press. Information so far from EU is that any UK flagged boat which is in the EU on 31/12, will keep its EU VAT status, any boat in UK waters will lose it.
What about boats in Turkey, which is not in the EU, but is in the customs union?
 

Seven Spades

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30 Aug 2003
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4,011
Location
Surrey
1. Boats not in the U.K. have to return to the U.K. every three years to retain VAT paid status.
2. Boats must be in the EU on 31/12/20 to retain EU tax paid status.
3. EU vat paid boats that have never been in the U.K. and are in the EU on the 31/12/20 will not qualify for returned goods relief so will not be deemed VAT paid in the U.K.

The three year limit can be got around if you become non-resident for tax purposes in the year you want to return to the U.K. because of the personal possessions exemption.
 

Graham376

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15 Apr 2018
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Boat on Mooring off Faro, Home near Abergele
3. EU vat paid boats that have never been in the U.K. and are in the EU on the 31/12/20 will not qualify for returned goods relief so will not be deemed VAT paid in the U.K.
Have you seen this written somewhere? Just trying to understand why this is the case - A VAT paid boat in the EU now is UK VAT paid as well under the terms of the Customs Union. If the (UK resident) owner brings it to the UK soon after we leave, why will it have lost UK VAT status?
 

lustyd

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27 Jul 2010
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4,634
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Me, Reading. Boat, Portsmouth
I think it's because they had to pick a way to decide where the tax paid status would be valid. The arbitary test chosen was location at the point of Brexit this New Years. Therefore if your boat is in UK waters it's UK VAT paid and if it's in EU waters it's EU vat paid. In both cases there's a loophole for visiting boats if needed such that within the normal time frame you can return "home" with your boat. If you keep the boat on the opposite side and it's never lived at your "home" then that will count as an import rather than return.
 

Chris_Robb

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15 Jun 2001
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7,748
Location
Haslemere/ Evia Island
I think it's because they had to pick a way to decide where the tax paid status would be valid. The arbitary test chosen was location at the point of Brexit this New Years. Therefore if your boat is in UK waters it's UK VAT paid and if it's in EU waters it's EU vat paid. In both cases there's a loophole for visiting boats if needed such that within the normal time frame you can return "home" with your boat. If you keep the boat on the opposite side and it's never lived at your "home" then that will count as an import rather than return.
The wording of the EU Commission announcement on Vat Status was:
If the vessel is in UK Customs territories on 31st Dec 2020 it become UK Vat Paid. No mention of those being in EU Customs Territories so your boat can be anywhere in the world. There is an exemption for 3 years from date of leaving the EU. Whether we can claim a waiver on returning later as an EU national would be able to do is not certain.
 

Stork_III

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6 Aug 2002
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On Lockdown
Have you seen this written somewhere? Just trying to understand why this is the case - A VAT paid boat in the EU now is UK VAT paid as well under the terms of the Customs Union. If the (UK resident) owner brings it to the UK soon after we leave, why will it have lost UK VAT status?
This CA article appears to say if the UK boat was exported from UK within 3 years prior to 31 Dec 2020, RGR would apply. If not it wouldn't. A boat bought in EU and never returned to UK within 3 years prior to end of 31 Dec 2020 will have to pay VAT again in UK.

Brexit: VAT on boats outside the UK – Urgent Update | CA

As does this RYA Artivle. UK boat owners left stranded in Europe and leisure marine industry faces turmoil due to Government inaction
 

Graham376

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15 Apr 2018
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Boat on Mooring off Faro, Home near Abergele
There is still a question to be answered, which the RYA are looking into as they didn't have the answer.

If a UK VAT paid boat is in the EU on B day, we know it will keep its EU status if it remains there but, what will happen if a non-EU resident owner then takes the boat out, say back to UK, within the RGR period. Will it later be able to return to the EU under the same ownership claiming RGR or will it have been exported and due VAT because the owner is not an EU resident?
 

Graham376

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Boat on Mooring off Faro, Home near Abergele
By NonEU Resident do you specifically mean Uk resident? Or something else?

RGR in the Uk only applies to Uk residents who are and have been the owner.
I was thinking UK citizens mainly. For some time now we have been working on the theory that a boat in EU waters 31/12 will retain it's EU VAT, which is correct and some folks who live within easy reach are planning to sail over for a few days for that reason. I've not seen anything official published about what happens in the EU when it leaves again, such as with those folks who were only there temporarily or, others there longer but don't have residence. Will it then lose its status or not?

Most third country citizens don't have VAT paid boats so they come under different regulations and can't be compared.
 
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