After brexit will a UK registered boat be subject to vat in Europe

[Artic Warrior]

Hi ...
Uk citizen who owns a UK registered sailing boats currently in Greece would I be subject to VAT even though the boat is VAT paid already would this occur after a certain time scale after brexit

 

[macd]

No one...by which I mean absolutely no-one on this planet...can do more than hazard a guess.

My money's on some form of transitional arrangement, of which the EU is historically quite fond. It may be that any boat VAT-paid in the EU 28 becomes also VAT-paid in the EU27 post-Brexit. Different arrangements would probably apply to vessels bought after Brexit. It may also (or instead) have a bearing where VAT was originally paid: whether in the EU27 or the UK.

Incidentally, flag state is of little relevance. So far as the EU is currently concerned, the VAT nationality of a boat is the country of residence of its owner.

Other guesses are available.

P.S. This is by no means the first thread on this very subject. You might wish to search for it's predecessors. You might equally wish to eat broken glass

 

[Artic Warrior]

Yes like you say it's pie in the sky and an unknown as yet.....
My boat was French paid vat
Just fingers crossed with it all.

 

[Graham376]

There's a multi-page recent thread here - http://www.ybw.com/forums/showthread.php?497530-Post-Brexit-Cruising&highlight=vat+after+brexit

 

[Tranona]

Incidentally, flag state is of little relevance. So far as the EU is currently concerned, the VAT nationality of a boat is the country of residence of its owner.

Not quite true. It is the state where VAT was paid, not the state of the owner. So it is possible (as now) for a non EU resident to own a EU VAT paid boat.

So, given the OPs VAT was paid in France it will be unaffected by anything that applies to the UK after Brexit.

BTW I am moving towards a position where nothing will change on the VAT front if we come to an agreement ("deal") with the EU on the basis that it is all too difficult and the EU will not agree to any changes but the deal will be just cosmetic. On the other hand "no deal" is gaining traction and then it really is anybody's guess.

The new Project Fear is around the consequences of no deal rather than a negotiated deal which suggests it is a strong possibility.

 

[macd]

Not quite true. It is the state where VAT was paid, not the state of the owner. So it is possible (as now) for a non EU resident to own a EU VAT paid boat.

Sorry, I should have been clearer. By "nationality" I was referring not to sovereign state but to EU vs non-EU (which presumably would be what applies when the UK becomes non-EU). As you'll be aware, in that respect (such as for Temporary Importation), VAT applicability is based on owner's place of residence. Flag in either case is irrelevant.

 

[macd]

My boat was French paid vat

In the the event that your boat becomes deemed not EU VAT-paid (which I think unlikely), it will be eligible for Temporary Importation after Brexit, just as any boat owned by a 'third country' resident is now. That allows a VAT-free stay in the EU for 18 months, and is widely used now by Antipodeans, Americans and others. The TI clock can be re-set by a day in a non-EU country such as Turkey or Albania, allowing another 18 months, ad infinitum. More troublesome may be the limitation on your personal stays in the EU, which may be as little as three months in any six.

 

[macd]

My boat was French paid vat

In the the event that your boat becomes deemed not EU VAT-paid (which I think doubly unlikely), it will be eligible for Temporary Importation after Brexit, just as any boat owned by a 'third country' resident is now. That allows a VAT-free stay in the EU for 18 months, and is widely used now by Antipodeans, Americans and others. The TI clock can be re-set by a day in a non-EU country such as Turkey or Albania, allowing another 18 months, ad infinitum. More troublesome may be the limitation on your personal stays in the EU, which may be as little as three months in any six.

Incidentally, our boat is VAT-paid in Spain, so yours is an issue I've considered with special interest.

 

[Tranona]

Just a small update. The RYA mag (just arrived) reports no change in the real negotiating stance, but does say that there is broad agreement on both sides (EU and UK) about the post Brexit position on the status of pre Brexit VAT paid boats. Does not, however say what the agreement is, just that status quo is what the RYA is lobbying for.

 

[Uricanejack]

Just a guess.
These things are usually not retroactive. A boat currently registered and tax paid would continue to be regarded as tax paid by both.
New boats after the change. who knows. Theoretically would be one or tother. Not both. Depending upon where bought and registered. Cant see why the EU would regard a boat which was sold and paid tax to a non member state as EU tax paid.

But why would you care unless you intended to export the boat or import it.

 

[Artic Warrior]

Do you think a no deal could happen......
I know they are not agreeing on much so hopefully it fails

 

[KellysEye]

As far as I know you can't pay VAT twice we bought a boat in Holland VAT paid and paid none when we brought it back to the UK when we showed the Dutch VAT certificate.

 

[Cockaigne]

My British-registered boat was built in the UK in 1967, ie before VAT was introduced and, as a consequence, no VAT has ever been paid on her. She is kept in France and I hope that I will be able to continue to keep her there post-Brexit, without having to pay French VAT.

 

[Graham376]

As far as I know you can't pay VAT twice we bought a boat in Holland VAT paid and paid none when we brought it back to the UK when we showed the Dutch VAT certificate.

Obviously, because the UK was within the EU at the time and many suspect/hope that existing VAT paid boats will retain their status.

However, once we have left, if someone buys a newer but second hand boat abroad, built post Brexit and EU VAT paid in the EU and then imports it to the UK, UK VAT and duty/tariff "may" likely be payable.

 

[Motor_Sailor]

. . . then UK VAT and duty/tariff "may" likely be payable.

Absolutely. Bringing secondhand boats back from the continent in the future will be no different to bring a secondhand boat back from Florida. Just because you paid Sales Tax there doesn't exempt you from your UK VAT liability on import.

The EU might also require that EU VAT is paid on all boats kept in the EU. The fact that your boat is UK VAT paid will probably no longer count for anything.

Of course a reciprocal arrangement might be negotiated as part of our exit deal, but sorting this out is way down the list of government priorities and there's no sign they're even sorted the big stuff out yet.

 

[Tranona]

There is a report today of a proposal to keep UK in the EU VAT system even if we leave the single market and customs union. All leaked of course and suspect in this case by "leavers" because that would mean being still subject to the ECJ.

All of this is guesswork but despite what some commentators say, government is well aware of all the possibilities - just does not seem to know how to choose the optimum outcome let alone how to achieve it. Even if it did no guarantee it would get anything through parliament.

 

[Graham376]

..........All of this is guesswork but despite what some commentators say, government is well aware of all the possibilities - just does not seem to know how to choose the optimum outcome let alone how to achieve it. Even if it did no guarantee it would get anything through parliament.

The few numbers of leisure boats moving between States, doesn't give politicians much cause for concern but, IIRC we come under "means of transport" (or some similar name) bracket so, when road, air and sea are all lumped together, it's a massive problem.

 

[Tranona]

The few numbers of leisure boats moving between States, doesn't give politicians much cause for concern but, IIRC we come under "means of transport" (or some similar name) bracket so, when road, air and sea are all lumped together, it's a massive problem.

From the VAT point of view boats have their own specific regulations, although in some ways (such as initial VAT payment) similar to other means of transport. The issue though of requiring evidence of VAT payment to move freely is, however unique to leisure boats.

 

[Fr J Hackett]

As long as the UK is in the EU then when VAT is paid and collected a proportion of that VAT finds its way back to Brussels, so any boat that has had VAT paid would have some of that VAT paid into the EU coffers so the EU really can't not recognise the VAT status of boats pre March 30 (or some other date yet to be announced) 2019. What happens after with boats sold and tax paid in the UK is anyones guess as also is how people will prove to a European customs official that VAT was paid, will they accept the builders declaration?

 

[Tranona]

As long as the UK is in the EU then when VAT is paid and collected a proportion of that VAT finds its way back to Brussels, so any boat that has had VAT paid would have some of that VAT paid into the EU coffers so the EU really can't not recognise the VAT status of boats pre March 30 (or some other date yet to be announced) 2019. What happens after with boats sold and tax paid in the UK is anyones guess as also is how people will prove to a European customs official that VAT was paid, will they accept the builders declaration?

The EU can do whatever it likes if it thinks it is in the interests of the EU. Logic has little to do with it. Logic says if we leave completely we become a third country and boats from third countries are not allowed to move freely. On the other hand if there is a negotiated settlement that leaves the UK part in and part out (which looks probable) then some sort of compromise is likely. the difficulty in arriving at that compromise is that the issue of how to identify and classify boats according to VAT payment is far more complex than at first sight.

As to evidence, the three types of evidence accepted, largely depending on the state where the VAT was paid are commercial receipt (UK) official state registration of payment (most other states) or customs receipt for private imports.

Anything a builder "certifies" is completely irrelevant except perhaps the invoice for the original sale if it was to a private individual. Even then it would have to be the original, not a copy.