Buying a boat not VAT paid?

davethedog

davethedog

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Hi all,

I see some boats for sale in the EU marked as not VAT paid, so what exactly does that mean if you take it to the UK? Can you have it in the UK for a certain amount of time before having to leave and return as you can do in the Med (i.e you can take a boat from the Canary Islands to Morocco for a day to reset the 18 month VAT not paid clock)?

Thanks

DTD
 
davethedog said:
Hi all,

I see some boats for sale in the EU marked as not VAT paid, so what exactly does that mean if you take it to the UK? Can you have it in the UK for a certain amount of time before having to leave and return as you can do in the Med (i.e you can take a boat from the Canary Islands to Morocco for a day to reset the 18 month VAT not paid clock)?

Thanks

DTD
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If you are a UK resident and you bring it to the UK you pay VAT on arrival, plus from next year it will need recertification. No legal way of bringing it into the UK without paying VAT. See VAT Notice No8 for the rules.

If you keep it in the EU then you are subject to TA rules and can keep it there for nominally 18 months, reset after leaving the EU and re-entering.

Most of the non VAT paid boats are charter boats in the Med although some may belong to non EU residents and there under TA. EU residents have to pay VAT if they buy such boats and keep in the EU.

Most of the boats are of little interest to UK buyers unless they are looking to keep a boat in the Med and can cope with the Schengen travel restrictions and the TA rules. May also be attractive to a small number who might be interested in sailing off across the Atlantic rather like many from the US or down under have done over the years.
 
If you are UK resident and want to keep the boat in the EU and never ever bring it to the UK, then this is an interesting possibility. You can keep it there and never pay VAT. You just need to take it out of the EU (not to the UK) every 18 months to reset the clock.

If you want to bring it to the UK, then you need a boat which was certified to RCD II (i.e. basically a boat newer than 2013) and pay the VAT on arrival. So buying the boat VAT unpaid means you should be getting it 20% cheaper.
 
Tranona said:
If you keep it in the EU then you are subject to TA rules and can keep it there for nominally 18 months, reset after leaving the EU and re-entering.
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One thing I have been wondering about with respect to this, is: If the boat is not EU VAT paid.., presumably the 18 months do not reset just because I buy the boat - I would need to find documentation showing when the boat was last out of the EU under the previous owner, and count the 18 months from then.

Is that correct?
 
davethedog said:
Another question, can a boat non VAT paid be put on the SSR?
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Any boat can be put on SSR by a British Citizen, although the person must declare he owns it, although no proof of ownership is required. SSR (part 3) doesn't cross reference anything such as VAT paid status or RCD compliance.
 
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superheat6k said:
Any boat can be put on SSR by a British Citizen, although the person must declare he owns it, although no proof of ownership is required. SSR (part 3) doesn't cross reference anything such as VAT paid status or RCD compliance.
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When I registered my boat on the SSR about a year ago, I had to submit evidence of ownership. The bill of sale was sufficient. I also had to provide evidence of UK citizenship. I think they've got stricter in the last few years. But as you say, it's totally irrelevant to VAT status and RCD compliance.
 
Laser_310 said:
One thing I have been wondering about with respect to this, is: If the boat is not EU VAT paid.., presumably the 18 months do not reset just because I buy the boat - I would need to find documentation showing when the boat was last out of the EU under the previous owner, and count the 18 months from then.

Is that correct?
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Two issues. First it depends on on which state you are talking about and how they implement the rules. Croatia for example will require you to go outside territorial waters, then re-enter. Greece seems (or seemed) to allow the transfer without leaving. Second buying from a current owner with a boat in TA is probably a tiny minority, whereas buying VAT free from a business means in theory the 18 months starts from when you take ownership.

Probably the real answer is you will only find out when you actually apply to customs where you take the boat over.
 
davethedog said:
Not sure yet, but older than 1990 (1985 to 1990)
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Age may well be an issue as boats from that era were not built to the RCD (which came in 1997) so will need to go through a post construction assessment. Originally it was thought that boats built pre 1997 in the EEA would be exempt, however it appears that this is not now the case. The latest guidance from HMG is here https://assets.publishing.service.g...eational-craft-regulations-2017-version-2.pdf

All the indications are that importing a used boat into the UK in the future will be difficult and expensive so if you are thinking of going down that route then makes sense to get professional advice, first from the RYA for general advice and then perhaps from a certifying body in relation to a specific boat.
 
Thanks for all the advice and will have a serious read up of all that, as the VAT is easy to understand (20% of the purchase price if we return to the UK) and speaking to a friend who bought a boat in the USA and brought it back the RCD compliance process cost about £6K.

So, guess this all now hinges on how much the couple we know want for their boat and if the "juice is worth the squeeze" as the boat does need some work (interior woodwork sorting and a few other things) but for the right price it could be an option.

DTD
 
That is right. Although some get a bit obsessed with the purchase price and paying tax etc, the key figure to aim for is the total cost of getting the boat where you want it in the condition you want. Then make some sort of comparison with the alternatives available to you (if any!)

Good luck with working through that process.
 
Tranona said:
That is right. Although some get a bit obsessed with the purchase price and paying tax etc, the key figure to aim for is the total cost of getting the boat where you want it in the condition you want. Then make some sort of comparison with the alternatives available to you (if any!)

Good luck with working through that process.
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Agree fully
 
Laser_310 said:
One thing I have been wondering about with respect to this, is: If the boat is not EU VAT paid.., presumably the 18 months do not reset just because I buy the boat - I would need to find documentation showing when the boat was last out of the EU under the previous owner, and count the 18 months from then.

Is that correct?
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I bought a VAT NOT PAID boat in Greece a few years ago from a private seller. Greek customs issued a new transit log with 18 months duration. However they will only do this if you can produce the previous transit log showing the boat was there under a still valid TA at the time of purchase.
 
davethedog said:
Thanks for all the advice and will have a serious read up of all that, as the VAT is easy to understand (20% of the purchase price if we return to the UK) and speaking to a friend who bought a boat in the USA and brought it back the RCD compliance process cost about £6K.

So, guess this all now hinges on how much the couple we know want for their boat and if the "juice is worth the squeeze" as the boat does need some work (interior woodwork sorting and a few other things) but for the right price it could be an option.

DTD
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If you do buy abroad and have to undergo the VAT payment process it is worth considering a purchase in three separate transactions: 1 Brokers and any other professional fees - ask this to be taken off the sale price and pay it yourself - No UK VAT is required to be paid on an overseas services transactions, so do not include these in the boat's purchase value; 2 Inventory is all secondhand goods and thus not eligible for VAT, again ask for a separate invoice (NB do not take the piss here !) and pay this separately; 3 the boat itself upon which you pay the 20% VAT, and for which HMRC will want to see the Invoice. If you want to know the actual mechanism on how to do this please PM me as I did a write up about it at the time as the actual process is not so easy to follow, and very few have actually been through the process of paying VAT on an imported boat.
 
superheat6k said:
Any boat can be put on SSR by a British Citizen, although the person must declare he owns it, although no proof of ownership is required. SSR (part 3) doesn't cross reference anything such as VAT paid status or RCD compliance.
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Citizen or resident? I think that you need to prove residency. A UK citIzen resident overseas cannot use SSR.
 
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