Brexit and VAT status - flotilla from UK

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Tintin

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Comrade Red said:
With Brexit no deal looking more likely, my thoughts turn to the VAT status in the EU of my boat.

Have read the RYA advice at https://www.rya.org.uk/knowledge-advice/current-affairs/Pages/no-deal-Brexit-scenario.aspx

Am thinking I and others could well best ensure EU VAT status by ensuring boat is in EU on 31st Oct, so could there be a flotilla of British boats all heading the same way before end if Oct? It seems likely.
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You'll have been in the EU on 30th October - will one day more really make a difference? You lose EU VAT paid status anyway if you spend two years (?) outside.
 
JumbleDuck said:
True, but any boat which leaves the EU for two years - to Norway, say, or the Channel Island, or perhaps in due course to Boristan - loses that status again. The issue addressed in the OP's RYA link is about "union status", not VAT.
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The OP specifically mentions "EU VAT status". Try to get some kind of official tax statement for a pre-1985 boat that you buy today in the EU. I don't know for all EU countries, but in some of them you get a response that you get nothing simply because the boat is pre-1985.

Add to that the fact that not all EU countries have mandatory registered boat ownership for pleasure yachts then with no paperwork required and no registered owner required who knows where the boat has been, owned by, etc. The boat is here today and owned by me solely because I say so.
 
This is a subject that is of interest to me, as I plan on going cruising in a year or two's time.

The VAT on my boat was paid in the Azores (EU) on route from Antigua to the UK, so currently it has EU Vat-paid status.

Since then, it has lived in the UK (for 8 years), however as the UK is currently part of the EU, I assume that it has not left the EU in that time.

I guess the question is, will my boat have to be in the EU on 30th/31st to remain EU Vat-paid, or will it be deemed that it is (as the VAT was actually paid in the EU), with the "2 years outside the EU" clock ticking from 1st November?
 
I went through the opposite when Croatia joined the EU, I assume leaving the EU will simply be the reversal of the process. After Brexit the following will likely be the case.

For UK citizens:

Boats with VAT paid will remain VAT paid in the country they are in when Brexit actually happens. Marina receipts were adequate evidence. UK based boats will become UK Goods EU based boats will become EU goods.

A UK based boat with a UK citizen as owner will be fine. In the UK VAT is paid and visiting the EU will just need customs clearance and the boat can stay for 18 months under temporary import before it has to leave and re-enter. This was the situation I was in with a VAT unpaid boat in Croatia before Croatia joined the EU. Clocking out and in again took a day, this process resets the 18 months temporary import. Failing to check a foreign boat in or out can lead to siezure until import duty/VAT is paid - my import/export paperwork was checked every time I reset the 18 month temporary import clock. How EU countries near the UK (France, Belgium, Holland etc.) choose to police this with respect to UK boats remains to be seen - it could be red diesel on steroids or it could be very relaxed.

UK citizens with a boat in the EU will retain EU VAT paid status. The boat is seen as EU goods (imported) so it can stay in the EU indefinately. If it is brought back to the UK, UK Returned Goods Relief will apply (according to RYA website) and it will escape VAT and import duty. If it changes hands outside the UK or is modified outside the UK this will not apply and it will lose its UK VAT paid status.

For EU citizens the reverse is true.

Impact on second hand market: Private UK boats will become less attractive to EU buyers (even with the falling pound) as they will not retain VAT paid status on purchase and will be liable to import duty and VAT on entering the EU. Depending on how the rules end up, they could also have the same issues as import from the US regarding RCD, CE marking etc. This is all an unknown and only time will tell. Similarly, second hand EU VAT paid boats will become less attractive to UK buyers for the same reasons - unless intending to keep them in the EU.

There is however an upside. UK citizens will be able to purchase and keep boats in the EU VAT free under temporary import. 18 month limit will apply but it isn't too much hassle. I used to do this in Croatia and it is relatively straightforward. Only problem will be that UK citizens without residency permits will only be able to spend 90 days in every 180 aboard - only a problem for live aboards, EU VAT paid or not.

This is what I am expecting but my boat is in the EU and will remain there. I am now a dual EU(German)/UK citizen so although my boat will no longer be UK VAT paid, I still have complete freedom of movement in the UK and EU.

EDIT: Edited to reflect new info on RGR post-Brexit on RYA website.
 
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PHN said:
The OP specifically mentions "EU VAT status".
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I know, and as far as I can see it won't make any significant difference to that if a boat is in or out of the EU on the first day of our Glorious FreedomTM. The article to which he links is about union status and UK VAT.
 
"I know, and as far as I can see it won't make any significant difference to that if a boat is in or out of the EU on the first day of our Glorious Freedom"

I admire your ignorance.

I normally spend 5 months each year sailing in the Baltic.

If my boat is outside the EU on Brexit Day [and that includes the UK], it loses its EU VAT status. This means I can keep it in EU waters for 18 months, at which point it becomes EU VAT payable. So … my options are Norway or Russia ...
 
I suspect it's not so simple.
A UK-owned boat, with a UK SSR registered to a UK resident, having been based in a UK port for the last 5 years will probably still be treated as a UK VAT paid boat if it happens to be visiting Cherbourg at the key hour. Much the same as if it happened to be in the middle of the Atlantic or in Jersey.
A UK owned boat 'permanently' based in the Med is clearly a different proposition.

There may be some awkward grey areas for UK boats which have been playing the 'just visiting' card in some EU countries for the last few years.
 
Joker said:
If my boat is outside the EU on Brexit Day [and that includes the UK], it loses its EU VAT status. This means I can keep it in EU waters for 18 months, at which point it becomes EU VAT payable. So … my options are Norway or Russia ...
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Can you give a reference to that? The article linked is only about union goods status, not VAT.
 
Baggywrinkle said:
UK citizens with a boat in the EU will retain EU VAT paid status. The boat is seen as EU goods (imported) so it can stay in the EU indefinately. If it is brought back to the UK, UK VAT will be due and possibly import duty as it will have lost its UK VAT paid status. Bummer for UK boat owners planning to bring their boat back to the UK after Brexit.
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As long as it is in the same ownership, VAT will not be due under the Returned Goods Relief rules.
 
lw395 said:
I suspect it's not so simple.
A UK-owned boat, with a UK SSR registered to a UK resident, having been based in a UK port for the last 5 years will probably still be treated as a UK VAT paid boat if it happens to be visiting Cherbourg at the key hour. Much the same as if it happened to be in the middle of the Atlantic or in Jersey.
A UK owned boat 'permanently' based in the Med is clearly a different proposition.

There may be some awkward grey areas for UK boats which have been playing the 'just visiting' card in some EU countries for the last few years.
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Last time we were home, I phoned the VAT enquiry dept. and received the following information, based on information they had at the time.

A UK boat in EU waters on Brexit day will retain it's current EU VAT status, which would normally be VAT paid or deemed paid for older boats. If the boat is later brought back to the UK under the same ownership, no VAT would be due under Returning Goods Relief which, for personal belongings (not business goods), can be far longer than 2 years.

If the boat is sold in the EU, the new owner would be liable for UK VAT if it is then brought back to UK.

If the EU based boat was brought back to the UK by its current owner and then sold in the UK, it would lose its EU VAT status and VAT would be due if it returned to the EU for >18 months.

It will be up to the owner to provide documented proof of the boat's location on B day.

All the above could change if we leave with a "deal".
 
Graham376 said:
As long as it is in the same ownership, VAT will not be due under the Returned Goods Relief rules.
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There are other get-outs for personal possessions, for instance an acquaintance recently brought in loads of furniture and other goods from the USA after living there for some years then relocating back here.

I'd be quite careful about assuming that the e.g. Portuguese authorities will be following general advice given by HMRC in any specific case.
 
Graham376 said:
As long as it is in the same ownership, VAT will not be due under the Returned Goods Relief rules.
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Just checked that, and you are indeed correct. The UK government seems to be intent on allowing RGR on assets returned from the EU post Brexit.

HMRC has advised the RYA that plans have been made to replicate Returned Goods Relief (RGR) into domestic law in the event of a no deal. RGR allows those resident in the UK to return with their belongings (including pleasure boats) to the UK without paying customs duty or VAT as long as the items have not been changed since their departure and follow the guidance given in the Notice 236 Returned Good Relief.
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https://www.rya.org.uk/knowledge-advice/current-affairs/Pages/no-deal-Brexit-scenario.aspx

... so there's a possibility to return the boat to the UK without paying VAT/Import duty again subject to whatever the RGR end up looking like. Sorry for any confusion I caused.

PS - What stops you moving your own boat from EU to UK and back again every 23 months and each time claiming RGR to retain VAT paid status in both the EU and UK? This was the reason I thought they might be more strict on either EU goods or UK goods, with one or the other ending on Brexit day. Effectively a boat in the EU on Brexit day gets EU goods (VAT Paid) status but doesn't lose its UK VAT paid status because it could later be counted as returning goods - looks like it's going to be one big paperwork exercise. Once they've thought about it it'll probably end up as the owner having to choose - EU goods or UK goods regardless of location. Then if a UK citizen chooses UK goods, his boat is automatically transfered to "temporary import" in the EU and has 18 months before it has to leave and re-enter - same for EU citizens with boats in the UK.
 
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Baggywrinkle said:
Once they've thought about it it'll probably end up as the owner having to choose - EU goods or UK goods regardless of location. Then if a UK citizen chooses UK goods, his boat is automatically transfered to "temporary import" in the EU and has 18 months before it has to leave and re-enter - same for EU citizens with boats in the UK.
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For those based on the south coast, they could have an EU marina invoice for the night before Brexit, then sail to the UK, having booked out,on Brexit day and get a UK marina invoice for that night. Boat would have been in whichever territory he chooses, depending on future circumstances. I think there will some very "constructive" paperwork when boats change hands in future.:)
 
So basically get a marina invoice inFrance for 31st Oct and 1st Nov, then sail back to UK. The EU invoice avoids any VAT nasties in EU for future trips, and the original invoice showing UK vat paid when new solves the UK.

A quick trip end of Oct therefore seems the best amd safest bet right now.
 
In this topic I read a lot of assumptions and no hard facts how regulations indeed will be applied. In part that is because the rules and regulations are not yet defined, so we cannot know at this moment.

I am not an expert on this topic, but just a few practical comments that might be worth to look into.

1. The boat has a flag, meaning that it belongs to a particular country. That is different from goods like e.g. a bike that are located in a country. If you have a car with a UK license plate in the EU after brexit that might as just well create a new situation which is different from your UK purchased bike in your EU holiday home.

2. Marina invoices normally do not uniquely identify one particular boat. If presence in some marina would work - which I don't know - then take care of rock solid evidence which will hold up in court that your boat indeed was in that marina at that time. After all it could be a look alike from somebody else or your friend the marina owner is just helping out without your boat actually being overthere.
 
PHN said:
1. The boat has a flag, meaning that it belongs to a particular country. That is different from goods like e.g. a bike that are located in a country. If you have a car with a UK license plate in the EU after brexit that might as just well create a new situation which is different from your UK purchased bike in your EU holiday home.

2. Marina invoices normally do not uniquely identify one particular boat. If presence in some marina would work - which I don't know - then take care of rock solid evidence which will hold up in court that your boat indeed was in that marina at that time. After all it could be a look alike from somebody else or your friend the marina owner is just helping out without your boat actually being overthere.
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Quite obviously, boats are totally different to bikes so, what's your point?

As far as marina receipts are concerned, all receipts I've received in EU States have my name, boat name & date. In places such as Portugal & Spain, a copy of boat and owner/crew details has to be sent to police.
 
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