st599
Well-known member
To make the problem a bit more interesting, the UK has not qualified to be on the EU's Covid safe list due to increasing case numbers in some towns, so from Jan 1st only essential travel from UK to EU.
Buying a boat from the EU and Brexit Transition date (re:VAT)
- Thread starter Nito
- Start date
D
Deleted User YDKXO
Guest
Yup bad news for anyone with a boat in the EU
UK holidaymakers barred from EU after 1 January under Covid rules
Irish Rover
Well-known member
Not so. Citizenship is not an issue. EU residents regardless of citizenship cannot avail of TA but EU citizens resident outside the EU [in UK for instance after 01 Jan] can avail of TA.
RJJ
Well-known member
Is anyone else planning a quick dart to Cherbourg on, say, 31st December? socially-distanced drinks on pontoon?
st599
Well-known member
That differs from what the RYA told our club.
Irish Rover
Well-known member
I'm an EU citizen resident outside the EU and I regularly avail of TA with my non EU registered boat.
TwoHooter
Well-known member
I was thinking about it because in our case there is quite possibly a lot of money at stake. It's literally the difference between having to sell the boat in just the UK market when the time eventually comes, or being able to market it in Europe also.
We started the year (and are ending it) with our boat in Plymouth. Plan A which was in my mind in the spring had been to move the boat to Cherbourg or Ireland in the autumn and take a winter berth to make sure we are there at the witching hour, whenever that turned out to be.
Then the first problem emerged: Covid or more specifically the lockdown response to Covid. When I saw what lockdowns looked like I decided this might mean abandoning the boat for months without access.
Plan B was the quick dart idea, either Ireland or France. But I went off it, and again the fly in the ointment is Covid, . Perhaps I was worrying too much but I thought the way things were going there might be at best a frosty reception and at worst a real bust-up about quarantine etc.. I have been getting information about the situation in France which suggests it's not the best place to be at the moment, and the Irish situation is apparently pretty dire too. It's not so much the formal rules which one can research and understand, it's more the way the uniforms on the ground interpret the rules.
I then wondered about anchoring the boat in EU waters, not in a port, and getting a few shore-based friends to take screenshots of my AIS transmission on marienetraffic and vesselfinder, at the witching hour, and signing witness statements that they did this. If one wants to maintain VAT-paid status in both the EU and the UK for a boat where the original VAT was paid in the UK, the boat MUST be in the customs territory of the Union between 22:59 and 23:01 UTC on 31 December 2020, and then return to the UK within the time limits for Returned Goods Relief, whatever that time limit turns out to be, but certainly years not months or weeks after the witching hour. The EU themselves say (here) that the customs territory of the Union includes their territorial waters (which is what you would expect), so an anchorage is just as good as a port if you have the evidence.
Territorial waters extend, I believe, 12 nautical miles offshore. So, theoretically, one could dart across to some safe anchorage off the Irish or French coasts, within the 12 mile limit, lie there through the witching hour, then dart back again.
Enter the next problem. Have you seen the weather charts?
If the weather doesn't improve I think I am scuppered. I really do.
TwoHooter
Well-known member
Someone is confusing citizenship with residency. Two entirely different things, in the same way that the flag tells you only about registration of the boat and nothing whatsoever about ownership.
Irish Rover
Well-known member
I've expressed the view previously that it won't be possible long term to maintain VAT PAID status in both the UK and the EU but I haven't seen anything official or from the RYA or CA on this aspect. Has there been some update I've missed?
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TwoHooter
Well-known member
EU returned goods relief and temporary admission | Current Affairs | Knowledge & Advice | RYA - Royal Yachting Association
'Whether or not the goods are exempt from customs duties is determined by the Union Customs Code (UCC), which permits goods that have Union status when they are exported from the customs territory of the European Union to be granted relief from import duty provided they return to that territory within three years. In summary, in order to be entitled to relief from VAT and, if applicable, import duty on arrival in the customs territory of the European Union (commonly called returned goods relief – or RGR) a recreational craft must:
- have had Union status when it was taken out of the EU; and
- have been exported from the EU by the same person as is importing it; and
- be in the same condition as when it was exported; and
- return within 3 years of export.
Brexit - what happens next? | Current Affairs | Knowledge & Advice | RYA - Royal Yachting Association
The RYA says that the EU RGR is expected to be replicated in UK law. This gov.uk page appears to confirm that. If so, a boat which meets the above conditions and is in the EU customs territory at the witching hour seems to me to keep its VAT-paid status in both jurisdictions provided it returns to the UK before 31/12/24, and also returns to the EU before that date. It will have to keep shuttling backwards and forwards between the UK and the EU for ever, always within the RGR time limit, but if it does that I think it can be sold in the UK or the EU, to a UK or EU resident respectively, without VAT having to be paid for the second time in the boat's life.
DavidJ
Well-known member
Most of us in the Med have had our boats (UK VAT paid) there for more than 3years so the no penalty “concession” is to return to the UK by year end 2021 not 31/12/24
I believe
I believe
TwoHooter
Well-known member
I think so, see this: Pay less import duty and VAT when re-importing goods to the UK and EU
Based on how the UK is run these days I think anyone who is thinking of using this concession should save the web page and probably make a screen print too, and keep these safe.
Hooligan
Well-known member
I do not think your plan C works. You would somehow need to prove that you were in the EU waters independently. Most everyone i know is getting a letter from their marinas in the EU stating that the boat was indeed there On the pm and am of dec 31.Jan 1. I think you would have a really tough time proving that you were anchored in EU waters and then getting them to accept this especially as your boat would be back in the UK. So in my view your best bet is simply to get over to France which should be ok now, and probably a few days before. wait a few days until say mid Jan and then bring it back. Because your boat is not in the EU now you will have three years to bring it back under UK rules ie from the day it was “exported”. However you may wish to consider how the EU will look at this if say you are in the UK with the boat and then next year either wish to sell or move it. Does one night in Paris on Dec 31 - so as to speak, mean your boat is forever tax paid in the EU? Would any EU resident take a chance on buying your boat?
Sadly this is all part of the absolute mess brought about by the insanity of Brexit. i actually think that the only sensible thing to do is to focus on where you want to use your boat. If the UK then keep it here. If the EU then move it now. If you want to go to the EU later with the boat then you can always use TA as long as you are NOT a resident of the EU. As others have said citizenship is irrelevant. Re sale, then I am afraid again that this is the price of Brexit. A UK boat residing in the UK - the boat that is - will no longer be attractive to a EU resident looking to buy a boat, period. A boat residing in the UK may be attractive to a UK resident who wants to buy a boat and use in the EU because he/she can use TA BUT such a resident would be far better to buy a non UK or EU boat ie Guernsey registered and VAT free and settled boat and then avail themselves of TA.
Bottom line - the boat selling market will have more arbitrage opportunities that the stock market next year!!
TwoHooter
Well-known member
There is absolutely no statutory definition of the evidence needed to prove the location of a boat for this purpose. Yes, people are getting letters from marinas but that's just what they have decided to do, and there's no guarantee that will work better than anything else. Vessels which are in transit in international waters will be in the same position as I described. The RYA says: 'It is recommended that you obtain and retain documentation which can be used to demonstrates the vessel’s location at the time the transition period ends.' They don't say what the documentation should be.
Absolutely, yes it does. This is one of those occasions when there is an irrefutable cut-off time and date, it couldn't be clearer. The witching hour as I call it, 23:00 UTC on 31/12/20 is crucial. It is where the vessel is at that moment in time that counts. Nothing else.
I foresee the boat being offered for sale while lying in the UK and if a buyer from the EU wants it there will be a conditional contract of sale under which the buyer will complete if (and only if) the vessel is placed in EU waters and a customs confirmation of RGR status is obtained - meaning it has retained its Union Goods status. For the avoidance of doubt you don't have to be an EU citizen or resident to claim RGR, the RYA says: 'According to the European Commission somebody who is not established in the EU27 can own a vessel with Union status and keep it in the EU27. As long as the vessel remains in the customs territory of the Union, the presumption of Union status applies. For customs purposes, the ownership of a vessel is not relevant.' So I will be able to make the application myself, the buyer will not be involved other than as an observer.
DavidJ
Well-known member
Useful link thanks
DavidJ
Well-known member
I guess I’m resigned to the fact that one day I’ll have to pay VAT (IVA) on my boat in Spain
I wonder how this will be enforced.
Will the Guardia Civil impound my boat one day when I’m not there?
Will they flag me down when I’m out for the day?
How would I preempt this and just “get it done”
However the RYA says this
"According to the Union Customs Code and specific assurances from the EC if a boat is in an EU port or is on EU waters at the end of the transition period, no VAT becomes due as there is no VAT taxable event (no importation). Afterwards, the boat can freely sail within the EU without any VAT becoming due and without any time restriction."
Regards
Stuart Carruthers
RYA Cruising Manager
I wonder how this will be enforced.
Will the Guardia Civil impound my boat one day when I’m not there?
Will they flag me down when I’m out for the day?
How would I preempt this and just “get it done”
However the RYA says this
"According to the Union Customs Code and specific assurances from the EC if a boat is in an EU port or is on EU waters at the end of the transition period, no VAT becomes due as there is no VAT taxable event (no importation). Afterwards, the boat can freely sail within the EU without any VAT becoming due and without any time restriction."
Regards
Stuart Carruthers
RYA Cruising Manager
Hooligan
Well-known member
Sadly all is up for interpretation. Yours is valid for you which ultimately is all that matters. For me it would not be worth the risk as it is my opinion that obtaining documentary proof that you were anchored for one night in EU waters in a form that is realistically acceptable to the EU VAT man is IMHO a big risk. The RYA has its views and who am I to challenge them. most of us with boats in the EU have taken the view that our marina contracts plus a letter from the marina - a EU registered business - is as good as one can get. A very good friend of mine bough a stunning old sailing boat. HMRC told him it was considered VAT paid but there were no records ie it was before records began. He transcribed the email correspondence etc etc. One day he sailed over to France. he got boarded by French customs who required him to leave his boat and said they would release it only upon proof acceptable to them of VAT paid or if he paid the amount they considered due. They would not accept what he had and so he ended up paying the French quite a considerable chunk of change. The UK was a member of the EU when this occurred. Personally i would not buy your boat without bulletproof evidence. If you were able to get that in the form you suggest at point of sale then of course that would be fine. Just to be clear any EU resident who owns a boat that is in the territory of the EU must have paid VAT Which is what I meant when saying that again in my view no EU residents will be buying boats based in the UK post Dec 31 unless there is bulletproof evidence that they are VAT accepted, want to boat in the UK only or are looking for a deal.
TwoHooter
Well-known member
Hooligan, I agree with all you say.
Yes, we are dealing with interpretation.
But so far as risk is concerned, I just don't see any.
If I complete the correct forms to export the boat from the UK prior to the end of the transition period, and the correct forms to bring it back and claim RGR, I am really not running any risk at all. I am in exactly the same position as someone who does a circumnavigation in a yacht and gets back within 3 years. There is no risk of being charged UK VAT or import duty.
My proposed selling method is also (almost) risk-free. The contingent contract I described means that if I can't get the documentary evidence of Union Goods status then my sale falls through and I bring the boat back to the UK. So the only risk is that I lose the sale. No risk of loosing any substantial amount of money.
andrewbarker
Active member
Any idea what the standard of proof is likely to be? Would you take a photo at, say, 22.59 on 31 December? Or a series of three taken at 22.59, 23.00 and 23.01?
I'm in the same situation as you, but down at Torrevieja, and all of this is new to the marina. As far as I can see, evidence of location would have to be that of a continuum through the transition from UK membership (ie prior to 23.00) and into the actual brexit (ie after 23.00). Or am I being paranoid?
Hooligan
Well-known member
Yes i do agree that completing all these forms is a great idea and i like the plan. My only concern is the anchoring in EU waters bit. I guess I am jaded by a view that I never ever saw a good divorce, even ones where both parties said they were good. Especially if money is involved!! And especially when everyone is bankrupt right now. the mix is not a good one. So I think you would make your plan almost bulletproof by putting the boat in a port/marina and having documentary proof. The only other thing I would add is that tax authorities have a habit of making rules up as they go along. Certainly it is the case in general taxation that if you are deemed to have taken an action that is in their eyes deemed to be an action taken to “avoid” tax, then they have an absolute right to be judge and jury. Again hence why if it were me i would go before Christmas, moor it in a marina, and wait until end January. Again it just helps the case. But sadly as they always say, anyone with assets that are visble, especially floating one’s, are sitting ducks!!