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Will British Registered Boats already in Europe command a premium in 2021

RupertW

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Graham
You seem to be more clued up on this subject than most of us. Regarding UK Returned Goods Relief, is there any time limit on how long the UK vat paid boat may be outside the UK? I recall mention of three years max.
Secondly, do we know of any cases where this relief has actually been claimed on yachts? I suspect that most returning yachts just ignore the whole VAT question.
Peter
Graham is still misunderstanding the situation. A boat which is not UK VAT paid can’t get Returned Goods Relief and as things stand if your UK VAT paid boat is in the EU on transition day it will lose UK VAT paid status so could visit the UK like any foreign boat but can’t stay there without being imported and tax paid again. Only if the UK government legislate to make boats in EU both UK and EU VAT paid can Graham’s proposal work.


Hopefully they will.
 

JBJag27

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Graham is still misunderstanding the situation. A boat which is not UK VAT paid can’t get Returned Goods Relief and as things stand if your UK VAT paid boat is in the EU on transition day it will lose UK VAT paid status so could visit the UK like any foreign boat but can’t stay there without being imported and tax paid again. Only if the UK government legislate to make boats in EU both UK and EU VAT paid can Graham’s proposal work.


Hopefully they will.
This is of course the problem with the "VAT paid" idea, as VAT is a transaction tax it doesn't matter that VAT was paid in the past it's entirely dependent on the last transaction.

I would imagine that normally it's quite hard for HMRC to prove that a boat was out of the country on a particular date. Given the UK's atrocious record keeping on departures and arrivals.
 
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Graham376

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Graham is still misunderstanding the situation. A boat which is not UK VAT paid can’t get Returned Goods Relief and as things stand if your UK VAT paid boat is in the EU on transition day it will lose UK VAT paid status so could visit the UK like any foreign boat but can’t stay there without being imported and tax paid again. Only if the UK government legislate to make boats in EU both UK and EU VAT paid can Graham’s proposal work. Hopefully they will.
Sorry but it's you who doesn't understand the situation. Suggest you should talk to VAT enquiry line as I have done, the phone no. is in #20.
 

Irish Rover

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Graham is still misunderstanding the situation. A boat which is not UK VAT paid can’t get Returned Goods Relief and as things stand if your UK VAT paid boat is in the EU on transition day it will lose UK VAT paid status so could visit the UK like any foreign boat but can’t stay there without being imported and tax paid again. Only if the UK government legislate to make boats in EU both UK and EU VAT paid can Graham’s proposal work.
Hopefully they will.
I believe Graham's explanation is factually correct. If you are a UK resident and your boat is in the EU on B Day and is EU VAT PAID then you will be able to bring it back to the UK in the future and not pay VAT under the Returned Goods Relief scheme. However I think the OP is asking about buying a UK registered boat in the EU post B Day and as I understand it once the boat changes hands outside the UK it will no longer qualify for Returned Goods Relief.
So if you're a UK resident looking for value after B Day do as I did and buy a VAT NOT PAID boat in the EU. You just need to sail it out of the EU once every 18 months. If you want to bring it back to the UK in the future you'll have to pay the VAT but the same will apply to buying a VAT paid boat in the EU after B Day.
If you do buy a VAT NOT PAID boat in the EU there's nothing to stop you registering it in the UK.
 

Resolution

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Thanks for the comments above. We obviously have a number of different variables to sort out!
But one question still remains: has anyone actually put a yacht through the Returned Goods Relief scheme?
 

Koeketiene

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Thanks for the comments above. We obviously have a number of different variables to sort out!
But one question still remains: has anyone actually put a yacht through the Returned Goods Relief scheme?
Yes, but that was over 20 years ago, so I doubt if my experience has any relevance now.
 
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Star-Lord

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I believe Graham's explanation is factually correct. If you are a UK resident and your boat is in the EU on B Day and is EU VAT PAID then you will be able to bring it back to the UK in the future and not pay VAT under the Returned Goods Relief scheme. However I think the OP is asking about buying a UK registered boat in the EU post B Day and as I understand it once the boat changes hands outside the UK it will no longer qualify for Returned Goods Relief.
So if you're a UK resident looking for value after B Day do as I did and buy a VAT NOT PAID boat in the EU. You just need to sail it out of the EU once every 18 months. If you want to bring it back to the UK in the future you'll have to pay the VAT but the same will apply to buying a VAT paid boat in the EU after B Day.
If you do buy a VAT NOT PAID boat in the EU there's nothing to stop you registering it in the UK.
A silver lining!
 

Sailfree

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At some future date I will sell my Jeanneau 43 DS. Its VAT paid and I have owned it since new.

I expect it to be in Portugal on Brexit day.

I assume it's best to sail it back to the UK and sell it in the UK if selling it to a UK citizen but if say the person buying wants to leave it in the EU it's best for sale to take place in Portugal and likewise for a sale to an EU citizen.

Am I understanding the situation correctly?
 

Irish Rover

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At some future date I will sell my Jeanneau 43 DS. Its VAT paid and I have owned it since new.

I expect it to be in Portugal on Brexit day.

I assume it's best to sail it back to the UK and sell it in the UK if selling it to a UK citizen but if say the person buying wants to leave it in the EU it's best for sale to take place in Portugal and likewise for a sale to an EU citizen.

Am I understanding the situation correctly?.
Perfectly, I'd say although the citizenship of the purchaser is not an issue just where they want to keep the boat. You could sell to a UK citizen in Portugal if he wanted to keep the boat in the EU or a Portuguese citizen in the UK if he wanted to keep the boat there.
 

Sea Devil

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I wonder how long it'll be before France realised that it usually takes longer than 3 months, or however long we'll be allowed, and a decent minority of the boats using their canals can't do it any more.
I belong to a large RIFT facebook forum of Brits with 2nd homes in France and they have been working hard at writing to their MPs about just this problem. Several countries have a 180 day stay relationship with France - Australia, South Africa so I imagine there is a good chance France will agree to something similar... Also its pretty certain you can leave your boat in Frenc waters 365 but its you personally that is subject to the 90/180 regulation.
 

V1701

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Can anyone advise on whether any or all of this VAT stuff applies to a boat built in 1969? I'd planned to get self & boat to Portugal before the end of this year & get a 5 year temp residency. Now I might be able to get self there & wangle a residency but probably won't be able to get the boat there. If I took the boat to Portugal next year would I be liable to pay VAT, it being such an old boat? If I did have to pay VAT, what is the rate? If I am liable it presumably would be a percentage of the price that I paid for her? Thanks for any advice...
 

Graham376

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At some future date I will sell my Jeanneau 43 DS. Its VAT paid and I have owned it since new.
I expect it to be in Portugal on Brexit day.
I assume it's best to sail it back to the UK and sell it in the UK if selling it to a UK citizen but if say the person buying wants to leave it in the EU it's best for sale to take place in Portugal and likewise for a sale to an EU citizen.
Am I understanding the situation correctly?
Correct but, some are looking at it slightly differently - where does the purchaser want the boat to appear to be?
 

Graham376

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Can anyone advise on whether any or all of this VAT stuff applies to a boat built in 1969? I'd planned to get self & boat to Portugal before the end of this year & get a 5 year temp residency. Now I might be able to get self there & wangle a residency but probably won't be able to get the boat there. If I took the boat to Portugal next year would I be liable to pay VAT, it being such an old boat? If I did have to pay VAT, what is the rate? If I am liable it presumably would be a percentage of the price that I paid for her? Thanks for any advice...
To get residence, you will have to provide an address and if no utility bills it's usual to have to provide two citizens to swear you live at that address - I had to do that many years ago. Marina address now seems to be acceptable without witnesses. Cars are allowed to be imported into Portugal by new residents at a discounted duty rate for some time after they have taken up residence but I don't know if that would apply to a boat brought in afterwards, you will have to check with customs there. My "guess" is that you will have to pay import duty and maybe VAT, based on the current value. VAT is 23%.
 

Irish Rover

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To get residence, you will have to provide an address and if no utility bills it's usual to have to provide two citizens to swear you live at that address - I had to do that many years ago. Marina address now seems to be acceptable without witnesses. Cars are allowed to be imported into Portugal by new residents at a discounted duty rate for some time after they have taken up residence but I don't know if that would apply to a boat brought in afterwards, you will have to check with customs there. My "guess" is that you will have to pay import duty and maybe VAT, based on the current value. VAT is 23%.
I'm not sure this is correct. The boat was built pre 1985 and if V1701 can satisfy the Portuguese Customs authorities of its status then he should be OK. This is a quote from HMRC but the same rules apply in Portugal-- "Certain vessels that were in use as private pleasure craft prior to 1 January 1985 and were in the UK or EU on 31 December 1992, may be deemed VAT paid under the Single Market transitional arrangements." It would probably be sensible to get something from HMRC to confirm its VAT paid status and that should satisfy the Portuguese authorities.
 

Graham376

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I'm not sure this is correct. The boat was built pre 1985 and if V1701 can satisfy the Portuguese Customs authorities of its status then he should be OK. This is a quote from HMRC but the same rules apply in Portugal-- "Certain vessels that were in use as private pleasure craft prior to 1 January 1985 and were in the UK or EU on 31 December 1992, may be deemed VAT paid under the Single Market transitional arrangements." It would probably be sensible to get something from HMRC to confirm its VAT paid status and that should satisfy the Portuguese authorities.
You may be right, I said I was guessing :) The "deemed paid" applies now but, will it apply in EU after we exit? They have already stated that boats not there, which is what V1701 now proposes, will lose their VAT paid status. I've no idea whether any import duty would apply as I've never had to look into that. He doesn't have to get all the way to Portugal by B day, France or Spain would suffice to maintain EU status.
 

Star-Lord

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At some future date I will sell my Jeanneau 43 DS. Its VAT paid and I have owned it since new.

I expect it to be in Portugal on Brexit day.

I assume it's best to sail it back to the UK and sell it in the UK if selling it to a UK citizen but if say the person buying wants to leave it in the EU it's best for sale to take place in Portugal and likewise for a sale to an EU citizen.

Am I understanding the situation correctly?
This scenario is what I am interested in... Surely your boat is more valuable to a British buyer because VAT is paid in Europe already. If it is British registered the this is also another plus. If a buyer buys a boat in UK and sails over they will have to pay VAT in Europe. OR leave Europe every 18 months to reset VAT clock?
So I am suggesting British boat buyers could be charged a premium for buying a VAT paid boat and a greater premium if it is British registered compared to the same vessel in the UK.
 

Baggywrinkle

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It's really simple.

As a UK citizen you will no longer be an EU citizen - this can be an advantage for yachtsmen.

The advantage for Brits is that they can buy non-VAT paid boats in the EU, keep them there under temporary import and save a huge amount on the purchase price.

If I owned a boat, VAT paid in the EU as a UK citizen with no EU citizenship I would not be worried about the VAT status of my boat. It will transition to EU goods on B-Day and can stay in its marina as long as necessary. If it needs to come back to the UK then abide by the rules for returning goods relief and that should be no problem either.

As a non-EU citizen you can keep a boat with no EU VAT paid in the EU indefinitely if you follow the rules - it needs to enter the EU under 18 month temporary import and you have to leave EU waters and return via a port of entry once every 18 months to reset the clock. It can be the same day and the same port - I've done it many times and it's easy.

It requires a day trip, once every 18 months to complete the check-out, check-in procedure and reset the temporary import period. It is not in any way "dodgy" and it's what all non-EU citizens with boats in the Med do - the ports of entry are used to it and it's a straightforward procedure.

If your boat is VAT paid in the EU (EU goods) then it can stay in the EU for as long as you like and it's EU goods status (VAT Paid) will remain intact. If it is brought to the UK then you may be able to claim returning goods relief to avoid paying UK VAT. See here: EU Commission confirms RYA thinking on Returned Goods Relief

If your boat has UK VAT paid and you take it to the EU, you can enter EU waters under temporary import rules and will not have to pay VAT or import duties. This will allow the 18 months of free circulation in the EU before you have to leave and re-enter to reset the clock. On returning to the UK, subject to conditions, returning goods relief will allow you to avoid paying VAT again in the UK.

All of these rules have nothing to do with where the boat is registered, although a boat registered in an EU country may attract suspicion if it is not VAT paid. This is because most countries require citizenship and often residency to allow entry on their register - and if you are an EU citizen then you will be expected to pay EU VAT.

IMO there is not really a huge problem for Brits with boats in the EU. The issues are if the boat is sold to another Brit when it is in the EU then the new owner will have to pay UK import and VAT when they bring the boat back to the UK - so sell it to an EU citizen instead.
 

Baggywrinkle

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This scenario is what I am interested in... Surely your boat is more valuable to a British buyer because VAT is paid in Europe already. If it is British registered the this is also another plus. If a buyer buys a boat in UK and sails over they will have to pay VAT in Europe. OR leave Europe every 18 months to reset VAT clock?
So I am suggesting British boat buyers could be charged a premium for buying a VAT paid boat and a greater premium if it is British registered compared to the same vessel in the UK.
As a Brit (with no EU citizenship) you would be mad to voluntarily pay VAT on a boat kept in the EU - it would be more sensible to buy a cheaper non-VAT boat. Use the temporary import procedure and avoid VAT and duties completely. I did this with my boat and the once-every 18 month check-out/check-in is a piece of cake and can easily be planned into a boating holiday. You turn up at the port of entry in the morning with boat papers and passports, fill out the forms, get your passports stamped, and get a once-over from customs, then you leave and head for the open sea. If you want to you can go out 12 nautical miles to leave national waters, but just sailing out of sight usually suffices - just don't nip round the corner and anchor for lunch - take the pi$$ and the police launch will follow you and it is at their discretion what they then do with you and your boat. Return in the evening after your day-sail and repeat the procedure - bingo, another 18 months.

As a Brit buying a boat for use in the UK you would be mad to buy a VAT paid EU boat - because the boat was bought outside the UK then the VAT status of it is irrelevant to the UK, returning goods relief is not available, and import duties and VAT will be charged on entry to the UK.

As a Brit buying a boat for use in the EU then cheaper non-VAT paid boats are available - why pay a premium for VAT paid when you don't need it and when it will be due anyway should you ever take the boat to the UK. The procedure in this case is to do an export and temporary import on a non-VAT boat - you do this on the day you take ownership of the vessel. It takes about 3 hours at a port of entry and is slightly more complicated than a check-out/check-in. This is how I bought my boat and saved 25% of the purchase price at the time.

There is no advantage as a Brit to having an EU VAT paid boat other than the one day every 18 months when you need to renew your temporary import.

Again, country of registration is irrelevant and separate to the VAT status.
 

Star-Lord

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It's really simple.

As a UK citizen you will no longer be an EU citizen - this can be an advantage for yachtsmen.

The advantage for Brits is that they can buy non-VAT paid boats in the EU, keep them there under temporary import and save a huge amount on the purchase price.

If I owned a boat, VAT paid in the EU as a UK citizen with no EU citizenship I would not be worried about the VAT status of my boat. It will transition to EU goods on B-Day and can stay in its marina as long as necessary. If it needs to come back to the UK then abide by the rules for returning goods relief and that should be no problem either.

As a non-EU citizen you can keep a boat with no EU VAT paid in the EU indefinitely if you follow the rules - it needs to enter the EU under 18 month temporary import and you have to leave EU waters and return via a port of entry once every 18 months to reset the clock. It can be the same day and the same port - I've done it many times and it's easy.

It requires a day trip, once every 18 months to complete the check-out, check-in procedure and reset the temporary import period. It is not in any way "dodgy" and it's what all non-EU citizens with boats in the Med do - the ports of entry are used to it and it's a straightforward procedure.

If your boat is VAT paid in the EU (EU goods) then it can stay in the EU for as long as you like and it's EU goods status (VAT Paid) will remain intact. If it is brought to the UK then you may be able to claim returning goods relief to avoid paying UK VAT. See here: EU Commission confirms RYA thinking on Returned Goods Relief

If your boat has UK VAT paid and you take it to the EU, you can enter EU waters under temporary import rules and will not have to pay VAT or import duties. This will allow the 18 months of free circulation in the EU before you have to leave and re-enter to reset the clock. On returning to the UK, subject to conditions, returning goods relief will allow you to avoid paying VAT again in the UK.

All of these rules have nothing to do with where the boat is registered, although a boat registered in an EU country may attract suspicion if it is not VAT paid. This is because most countries require citizenship and often residency to allow entry on their register - and if you are an EU citizen then you will be expected to pay EU VAT.

IMO there is not really a huge problem for Brits with boats in the EU. The issues are if the boat is sold to another Brit when it is in the EU then the new owner will have to pay UK import and VAT when they bring the boat back to the UK - so sell it to an EU citizen instead.
So therefore you can by a U.S. boat and sail it back and keep it in Europe and just reset clock every 18 months? U.S. It has always been a pain to import boats from America for use in Europe because of CE registration but if 'temporary import' then this works I suppose.
The U.S. has some great value boats imo that are very hard to find in Europe. Like Tartan and Sabre.
 

Baggywrinkle

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So therefore you can by a U.S. boat and sail it back and keep it in Europe and just reset clock every 18 months? U.S. It has always been a pain to import boats from America for use in Europe because of CE registration but if 'temporary import' then this works I suppose.
The U.S. has some great value boats imo that are very hard to find in Europe. Like Tartan and Sabre.
Yep, if you're a UK citizen with no EU citizenship that would work - it's what the US cruisers I've met in the Med are doing. The value of the boat when you decide to sell would be reduced as it was never officially imported to the EU or UK, and if you ever decided to bring it to the UK then there will be all the import hoops to jump through - but this will all be offset by the attractive original purchase price hopefully. (y) .... kitting out a boat for a transat where the boat is in the US, and converting all the AC gear to EU voltages won't be cheap. Maybe buy and cruise in the US before heading to Europe to give yourself time to sort out the boat first. Could be a viable plan.
 
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