Another VAT Question

[ColourfulOwl]

I'm looking to purchase a boat within the EU. I've seen a few boats that look good, but quite a few don't have a VAT paid status. During the sale of the boat, do I have to pay VAT in the country its current registered? If I do, do I then need to pay VAT again when bring the boat back to the UK?

For example, say the boat is in Italy:
Boat price: £55,000
Italy VAT (22%): £12,100
UK VAT (20%): £11,000
Total: £78,100?

UK citizen. No other citizenships.

I'm looking to purchase a boat that I intend to actual live on, leaving the landlubber life behind. Ideally I'd like to be able to bring the boat back to the UK for the first 12 months of being a liveaboard to get acclimated to the live aboard life, but also to deal with any repairs, upgrades and customisations to the boat whilst still having access to a property to stay at. It would be great to also have the option to come back to the UK at any time in the future and not be stung with import charges (coming back to visit friends family etc). It would also be nice to be sailing a British registered vessel (I believe the being on the SSR allows the UK flag, and is not impacted by VAT status) as a British citizen, but not sure how much that would end up actually costing with the VAT and import malarkey. After those 12 months I intend to move around likely heading to the med for a year before circumnavigating.

What are peoples recommendations? Should I just look for boat in the UK instead of trying to bring one back from the EU? Should I bit the bullet if find an amazing deal for a boat in the EU, and just not bring it back to the UK?

 

[AndersG]

Where are you resident?

 

[ColourfulOwl]

Where are you resident?

UK No access to any property in any other country... Unfortunately don't have the money for a holiday home on a sandy beach ?

 

[Graham376]

If you are UK resident, you can have a VAT unpaid boat in the EU for 18 months at a stretch, it then has to leave the EU just for a day to start another 18 months on its return. If you take the boat to the UK then VAT is due immediately, regardless of its EU VAT status.

 

[ColourfulOwl]

If you are UK resident, you can have a VAT unpaid boat in the EU for 18 months at a stretch, it then has to leave the EU just for a day to start another 18 months on its return. If you take the boat to the UK then VAT is due immediately, regardless of its EU VAT status.

Makes sense. So If i bought the boat, brought it back to the UK and paid the UK VAT, does that then give the boat EU VAT status (gotta love brexit)? If so does the 18 month window no longer apply?

 

[dunedin]

If you are UK resident, you can have a VAT unpaid boat in the EU for 18 months at a stretch, it then has to leave the EU just for a day to start another 18 months on its return. If you take the boat to the UK then VAT is due immediately, regardless of its EU VAT status.

So theefore buying a boat in EU which is not VAT is in fact an advantage. Should be roughly 20% cheaper, so then have options of
(a) sailing in EU subject to moving out every 18 months
(b) bringing to UK and paying 20% VAT - but as not paid previously, no worse off as a result

Might want to bring to the UK before the end of this year though to avoid the RCD certification issues which have been deferred to start next year (search forum for many discussions on this)

 

[dunedin]

Makes sense. So If i bought the boat, brought it back to the UK and paid the UK VAT, does that then give the boat EU VAT status (gotta love brexit)? If so does the 18 month window no longer apply?

No. If not currently EU VAT paid, it stays that way. paying UK VAT only now benefits in our little kingdom.

 

[sailaboutvic]

Just to break this down for the OP .
You would only pay vat on your return back in the UK .
Paying vat in the UK won't give you EU vat paid stutus.
If you don't bring it back but stay in the EU then you have 18 months as some have said before it had to leave the EU .
Buying a non VAT boat in the EU won't be as some as said cheaper , no more then some one coming to the UK and buying a UK paid but not EU paid boat.
I noticed you said Italy ,
Buyer pay the broker fee in Italy

 

[AndersG]

Makes sense. So If i bought the boat, brought it back to the UK and paid the UK VAT, does that then give the boat EU VAT status (gotta love brexit)? If so does the 18 month window no longer apply?

Nope. And if it was EU VAT paid it is not after you leave the EU unless you are an EU resident when you return to the EU.
A boat does not have a VAT status. VAT is due every time you enter the EU unless there is a relief. One of those is when the same EU resident that took the boat out of the EU is returning the boat to the EU.

 

[Star-Lord]

??if you want to live aboard in sunny climes and have a UK passport you need to leave EU every 90 days anyway so Tunisia, Morocco, Albania, Montenegro, Turkey, Israel and Croatia for now are all places you could stay on board. So if you bought a non EU VAT paid boat VAT is not necessary because you will be leaving the EU every 90 days. I would recommend doing works in mainland Spain (if buying in Italy) and you can pop over to Morocco or Tunisia for 90 days. If you speak French then Tunisia is the cheapest place for works - but you need to know what's what and keep an eye open. I would not buy an EU boat and take her back to UK to pay VAT and then bring her back to Europe if you want to save money. Jump in the deep end and just move to Europe and do the 90 day hop imho.

 

[Star-Lord]

Also... Untill the Orcas are culled I would stay in the Med for an easy life. Gasping to base myself back in Galifornia (Galicia) and Portugal (Azores) and Lisbon and Algarve but I am not going back to the Atlantic without either hand grenades or a bag of Pingers.

 

[Graham376]

Nope. And if it was EU VAT paid it is not after you leave the EU unless you are an EU resident when you return to the EU.
A boat does not have a VAT status. VAT is due every time you enter the EU unless there is a relief. One of those is when the same EU resident that took the boat out of the EU is returning the boat to the EU.

Not sure you're correct there. AFAIK RGR can be claimed whether the owner is an EU resident or not so, an EU VAT paid boat still retains it's status if returned under the same ownership.

 

[sailaboutvic]

Not sure you're correct there. AFAIK RGR can be claimed whether the owner is an EU resident or not so, an EU VAT paid boat still retains it's status if returned under the same ownership.

Graham right as long as he said it stays in the same ownership.
Although if sold privately its hard to say where it was sold .

 

[ColourfulOwl]

I would recommend doing works in mainland Spain (if buying in Italy) and you can pop over to Morocco or Tunisia for 90 days. If you speak French then Tunisia is the cheapest place for works

Unfortunately don't speak French. Is Spain generally a good place to get work done on boats?
As mentioned, intend to live on the boat, but there are various things need to be sorted before I can move on to it full time. I'm intending on still working full time with my UK employer but from the boat. I'll be putting down my permanent residents down as my folks place for HMRC etc etc. But when it comes to the boat things like house batteries, geni, solar, solar arch etc will need doing. You know, the cheap things ?. Will also be getting Starlink as I'll need stable internet (ironically Starlink is cheaper then what I currently pay for my fiber package ?).

 

[westernman]

If you import a boat into the UK it will have to pass the current version of UKCA (which at the moment is the same as EU RCD/2013). If your boat meets EU RCD/2013 (which it will do if it was sold on or after 2016 in the EU), then no problem. Otherwise, if it is very old, then it might be expensive to upgrade to pass UKCA. Built 2013 - 2015 it will probably comply - but be careful as there was no legal requirement for it to comply to the 2013 regulations at that time.

This is an unfortunate effect of the end of free movement of goods as a result of the unspeakable which we are not aloud to mention here.
You will of course have to pay VAT on importation to the UK.

However, thanks to Brexit you might be able to keep a boat in the EU for up to 18 months at a time without paying any VAT anywhere. The boat was EU compliant to the regulations in force at the time it was sold in the EU - so no need for any new compliance to the new rules (free movement of goods). However, check very carefully before going ahead. It might be difficult in that you might have to pay VAT and reclaim it on export (you might need to sail to a non-EU country and back again for that). Anyway, well worth trying to work out how to do it.

My experience of the Costa Brava area and the Western end of Mediterranean France is that french yards are cheaper and better than Spanish yards. YMMV.

 

[Graham376]

Unfortunately don't speak French. Is Spain generally a good place to get work done on boats?
As mentioned, intend to live on the boat, but there are various things need to be sorted before I can move on to it full time. I'm intending on still working full time with my UK employer but from the boat. I'll be putting down my permanent residents down as my folks place for HMRC etc etc. But when it comes to the boat things like house batteries, geni, solar, solar arch etc will need doing. You know, the cheap things ?. Will also be getting Starlink as I'll need stable internet (ironically Starlink is cheaper then what I currently pay for my fiber package ?).

Presumably you are aware of the 90/180 rule for UK citizens in the EU? You can't live on it here full time unless you have residence.

 

[Tranona]

Unfortunately don't speak French. Is Spain generally a good place to get work done on boats?
As mentioned, intend to live on the boat, but there are various things need to be sorted before I can move on to it full time. I'm intending on still working full time with my UK employer but from the boat. I'll be putting down my permanent residents down as my folks place for HMRC etc etc. But when it comes to the boat things like house batteries, geni, solar, solar arch etc will need doing. You know, the cheap things ?. Will also be getting Starlink as I'll need stable internet (ironically Starlink is cheaper then what I currently pay for my fiber package ?).

Most of the non VAT paid boats in the Med are ex charter boats, and mostly in Croatia and Greece. They are not necessarily the bargains they seem as many will have had a hard life. so be prepared for significant expenditure to bring them up to standard. There was a time in the past when such things were a good buy as charter fleets changed boats every 6 years or so, but now it is rare to see young boats as for the last 5 years fewer new boats have been bought so most for sale will be older. Look carefully at prices as the fall in the value of the £ means that prices are often close to UK VAT paid prices.

However, all this is irrelevant. As others have suggested what you are proposing is not feasible. You can no longer travel and work freely in the EU, and being on your boat rather than land does not change this. You are limited to 90 days out of any 180 unless you take up residence in one of the EU states, at which point you will have to pay VAT on your boat.

 

[ColourfulOwl]

Presumably you are aware of the 90/180 rule for UK citizens in the EU? You can't live on it here full time unless you have residence.

Yea I had seen a thread looking at that exact topic before. I'd be looking to get something a long the lines of a the non-lucrative long stay visa for Spain. Spain seems like the best middle ground country for me when it comes to moving the boat from the med to the UK and vice versa. After the first 18 months or so I intent to head south to the Canaries then Cape Verde before going west to the Caribbean. That's the plan anyway. But who knows ☺

 

[ColourfulOwl]

Most of the non VAT paid boats in the Med are ex charter boats, and mostly in Croatia and Greece. They are not necessarily the bargains they seem as many will have had a hard life. so be prepared for significant expenditure to bring them up to standard. There was a time in the past when such things were a good buy as charter fleets changed boats every 6 years or so, but now it is rare to see young boats as for the last 5 years fewer new boats have been bought so most for sale will be older. Look carefully at prices as the fall in the value of the £ means that prices are often close to UK VAT paid prices.

However, all this is irrelevant. As others have suggested what you are proposing is not feasible. You can no longer travel and work freely in the EU, and being on your boat rather than land does not change this. You are limited to 90 days out of any 180 unless you take up residence in one of the EU states, at which point you will have to pay VAT on your boat.

Honestly the boats I'm looking at are older. For my price bracket I'm looking more at boats that in the 1990-2005 range, which are private owned. I want to avoid ex-charter boats unless they've been really well looked after. Given the age range, not many charter boats seem to pop up when looking around.

As for the visa situation, it does seem I'll have to bite the bullet and get a residency visa. I was hoping to really get the first 12 months sorted along with any upgrades/updates made to the boat here in the UK then deal with visa's etc. But the more I look around it seems to make more sense to dive straight in and just get neck deep on being a liveaboard.

The concern for me is down to whether I'll acclimate to living on a boat. Throwing on moving country, loosing support network etc on top, it becomes a much bigger ask of oneself to make the plunge.

 

[Graham376]

Seems to me, it may be wiser to buy a rcd compliant boat in the UK and see how you like living aboard full time there with 90 days holidays in EU before looking at taking up residence elsewhere. There are no problems having a UK flagged boat in most of Europe, just have to pay VAT if you become resident and import it.