Brexit - latest on VAT Paid Status in the event of a 'no deal' Brexit

[Deleted User YDKXO]

Ref yr 2nd para, there is no reclaim on export. There is merely a zero rate of VAT ab initio if the goods are delivered outside the territory when new. Unless there are fundamental changes to VAT law, which I doubt will happen, then a boat used (by a normal end user consumer) for say 1 year in UK and UK VAT paid will require a second payment of VAT if then taken to EU, with no recovery of the first payment. I agree this problem probably doesn't occur if UK stays in a customs union.

I bow to your greater knowledge but there is certainly a scheme by which non EU residents can reclaim VAT paid on goods bought in the UK on leaving the UK and presumably after Brexit this will apply to all non UK residents assuming we do not remain in the customs union? I guess there is a time limit on this?

 

[MapisM]

there is certainly a scheme by which non EU residents can reclaim VAT paid on goods bought in the UK on leaving the UK

Nope M, such scheme wouldn't make sense for boats.
As jfm said, when a boatbuilder exports a brand new boat, no VAT is charged, though actually it's a VAT exempt rather than a zero rated invoice IIRC - but this is academic, and I might be wrong anyway.
Regardless, there's no VAT involved, so obviously you can't claim back what you didn't pay.

Otoh, when the same boat is sold to a private individual in the domestic market, the VAT is charged and paid, and even if it is not recovered in any way (as it happens with a sale to a private individual), it becomes a lost cost, not recoverable in any manner in the future, regardless of who/where will purchase the boat next. So, if the future buyer would be a foreigner who will bring the boat to a Country where VAT is due, the fact that it was already paid and not recovered in the UK is irrelevant to the destination Country.
In a sense, the fact that at the moment this IS indeed relevant within the EC is actually an exception, rather than the norm...

 

[jfm]

I bow to your greater knowledge but there is certainly a scheme by which non EU residents can reclaim VAT paid on goods bought in the UK on leaving the UK and presumably after Brexit this will apply to all non UK residents assuming we do not remain in the customs union? I guess there is a time limit on this?

That's inapplicable Mike. Has 3 month time limit, applies only to goods you can carry rather than freight, and expressly doesn't apply to boats. It's basically for foreign visitors shopping in London.

 

[Deleted User YDKXO]

That's inapplicable Mike. Has 3 month time limit, applies only to goods you can carry rather than freight, and expressly doesn't apply to boats. It's basically for foreign visitors shopping in London.

Yeah I thought it might not be that easy! In that case then, a Brexit outside the customs union is going to kill the used boat trade between the UK and EU or at least sellers engaged in such trade will have to accept lower prices to compensate for the double VAT liability. Of course it will also affect the trade in any secondhand goods between the EU and the UK between non VAT registered sellers/buyers and thats going to be a big problem. Ebay for example?

 

[MapisM]

Of course it will also affect...

Glad to be erudited if I missed something, but is it still likely that there will be anything affected at all?
Lately, my impression is that the main concern among most politicians is about how (rather than if) to arrange another referendum, without losing what still remains (no pun intended! ) of their personal reputation...

 

[Deleted User YDKXO]

Glad to be erudited if I missed something, but is it still likely that there will be anything affected at all?
Lately, my impression is that the main concern among most politicians is about how (rather than if) to arrange another referendum, without losing what still remains (no pun intended! ) of their personal reputation...

If only

 

[dune16]

Can I just get some clarification (if there is currently such a thing with the mess brexit has turned into). I am going to be purchasing a brand new boat from a UK dealer. The boat is built in France and will be commissioned there, it will not be shipped to the UK at all. 2 dealers I have spoken with have given 2 somewhat different answers. The first says UK VAT will be charged on the boat (even though the boat never enters the UK). The other dealer says as the boat never enters the UK the VAT would be charged in France (and presumably the actual boat cost will be charged without VAT by the UK dealer). Which of the above is correct? I'm obviously trying to keep the transaction as clear as possible to try and be in a better position when/if brexit occurs, I plan to keep her in Spanish waters indefinetely so really don't want the Spanish tax man to come calling trying to get VAT out of me if I've already paid it in the UK.

Thanks.

 

[jfm]

French vat unless it is still a nmt ( “new means of transport”- google it) when hits Spanish waters, in which case Spanish vat. Not Uk vat. Your “presumably” sentence is incorrect: dealer will have to register for Fr or Spain vat as this is a distance sale, and charge you. If they don’t, they need help. I’d strongly recommend you don’t pay them Uk vat

All this is current law Pre brexit.

 

[Ningaloo]

I disagree. It depends on who you buy the boat from. French dealer = French Vat. UK dealer = UK vat.

I purchased my new Germany built Hanse from Inspiration Marine in 2015 and paid 20% UK vat (not 19% German vat) even though the boat stayed in Germany.

After Brexit I imagine you would not pay any vat to the UK dealer and would be responsible for paying it yourself. This is what happened when my Australian friends purchased a new Hanse from the UK dealer.

 

[lw395]

I disagree. It depends on who you buy the boat from. French dealer = French Vat. UK dealer = UK vat.

I purchased my new Germany built Hanse from Inspiration Marine in 2015 and paid 20% UK vat (not 19% German vat) even though the boat stayed in Germany.

After Brexit I imagine you would not pay any vat to the UK dealer and would be responsible for paying it yourself. This is what happened when my Australian friends purchased a new Hanse from the UK dealer.

It's complicated.
Sometimes the address to which the sale is invoiced matters.

 

[jfm]

I disagree. It depends on who you buy the boat from. French dealer = French Vat. UK dealer = UK vat.

I purchased my new Germany built Hanse from Inspiration Marine in 2015 and paid 20% UK vat (not 19% German vat) even though the boat stayed in Germany.

After Brexit I imagine you would not pay any vat to the UK dealer and would be responsible for paying it yourself. This is what happened when my Australian friends purchased a new Hanse from the UK dealer.

Heck. Your 2nd/3rd sentences are not correct in my view, though I'm happy to agree to disagree.
Did your boat really stay in Germany? Like, you sail it out of Hamburg or something? Or did it go to another country a little while after you bought it?

 

[MapisM]

Your 2nd/3rd sentences are not correct in my view

I'm surprised to see yourself agreeing (if that's what your statement implies) with the first, either.

 

[jfm]

The first sentence was "I disagree". I can't disagree that he disagreed That is his choice

 

[Ningaloo]

The boat stayed in Greifswald, Germany where it was built for 3 years, although during that time I cruised extensively through the Baltic including Norway (not an EU member). The boat is registered on SSR without a home port. I use "deep water" as my home port which is one of many translations of the indigenous name "Ningaloo". Although I am currently back in the UK, this is temporary and I intend to return to France and beyond in 2020 or 2021, although clearly without the freedoms that I enjoyed pre-Brexit.

I think lw395 may have a point. My own residence is also a factor. Unlike my friends who sailed from Greifswald to Sydney, I did not consider avoiding EU VAT (as an Australian citizen) as I fully intended to keep the boat in Europe and I am resident in the UK. My previous boat was kept in Europe (France, Spain and Portugal) between 2004 and 2015 when she was returned to the UK for sale.

So my statement regarding the dealer that you purchase from may not be the whole story, however for a UK citizen, resident in the UK, I stand by it.

 

[MapisM]

The first sentence was "I disagree".

Doh, agreed (!).
At a glance, I was deceived by the fact that the post was split in 3 paragraphs...

 

[Deleted User YDKXO]

Never mind the arguments over whether UK VAT is due. Surely the point is to structure the deal such that the transaction is not done through the UK dealer at all to ensure that VAT is definitely paid in the EU as you intend to keep the boat only in Spain. I presume the transaction will be done after Oct 31st? Why take on the risk that a boat with UK VAT paid after Brexit, especially a no deal Brexit, is deemed non EU VAT paid by some zealous Spanish tax official? I know this risk is probably small but I’d be telling the UK dealer to find a way of invoicing you from a French or Spanish company in order that payment of EU VAT is 100% confirmed. It shouldn’t be beyond the wit of the UK dealer to work with the French factory or Spanish dealer to do that with some special agreement on warranties being the liability of the UK dealer if that’s a problem

 

[Portofino]

Never mind the arguments over whether UK VAT is due. Surely the point is to structure the deal such that the transaction is not done through the UK dealer at all to ensure that VAT is definitely paid in the EU as you intend to keep the boat only in Spain. I presume the transaction will be done after Oct 31st? Why take on the risk that a boat with UK VAT paid after Brexit, especially a no deal Brexit, is deemed non EU VAT paid by some zealous Spanish tax official? I know this risk is probably small but I’d be telling the UK dealer to find a way of invoicing you from a French or Spanish company in order that payment of EU VAT is 100% confirmed. It shouldn’t be beyond the wit of the UK dealer to work with the French factory or Spanish dealer to do that with some special agreement on warranties being the liability of the UK dealer if that’s a problem

+1
I will ask why did you not buy one through a Sp dealer ?
Or turned around why , or what was the rationale buying from a U.K. dealer since June 2016 if your intention was to keep it in EU ?

 

[dune16]

I have actually been in contact with a french dealer but could not get the same price I've managed with the uk dealer...

+1
I will ask why did you not buy one through a Sp dealer ?
Or turned around why , or what was the rationale buying from a U.K. dealer since June 2016 if your intention was to keep it in EU ?