Buying a second hand yacht in EU27 - what is the latest situation concerning VAT and import duty status when the yacht is brought to the UK?

[Nick C]

hi I called HMRC and the person i spoke to had no idea about any recent agreement with the EU concerning buying a second hand boat and importing it to the UK.

I also emailed the pleasure craft team at HMRC TWICE but they haven't bothered to reply or respond to a voice mail left their office number 03000 516864.

Is it subject to Vat and importation duty - I have looked at the 8 scenarios posted by RYA and Marine Fed and none seem to cover this obvious scenario..

Does anyone know what the situation is after the recent UK/EU27 agreements for buying a second had boat in the EU27 and bringing to uk?

 

[Tranona]

The rules are here.
www.gov.uk/government/publications/notice-8-sailing-your-pleasure-craft-to-and-from-the-uk

Pretty clear. If you buy a boat from the EU VAT is payable as it is an import. The reason it does not appear on the sources you looked at is that no "interpretation" is required. Their examples are intended to show how the reliefs quoted in the rules work in a range of circumstances.

The effect of course will be to make buying a boat in the EU - or anywhere outside the UK - potentially more expensive. However, despite the 25% extra (based on the purchase value) some may well find it worth doing as it is the landed cost of the boat in the UK after VAT that should be compared with buying a boat already in the UK. Also there are some boats that are simply not available in the UK and some may consider it worth paying the premium to import the boat.

 

[Ink]

Can you explain what the 'landed cost' of the boat is to a non-mandarin?

Regards
Ink

 

[[3889]]

hi I called HMRC and the person i spoke to had no idea about any recent agreement with the EU concerning buying a second hand boat and importing it to the UK.

I also emailed the pleasure craft team at HMRC TWICE but they haven't bothered to reply or respond to a voice mail left their office number 03000 516864.

Is it subject to Vat and importation duty - I have looked at the 8 scenarios posted by RYA and Marine Fed and none seem to cover this obvious scenario..

Does anyone know what the situation is after the recent UK/EU27 agreements for buying a second had boat in the EU27 and bringing to uk?

Looked into this in some detail and what Tranona says is correct. If you buy a boat in the EU now you must pay VAT (even if UK VAT was previously paid by another owner), but 0% duty, if you move it to the UK as a British resident. This applies if only visiting UK for one night. All the RYA scenarios relate to boats bought before 31.12.20.

 

[Tranona]

Can you explain what the 'landed cost' of the boat is to a non-mandarin?

Regards
Ink

"Landed cost" has a specific meaning for importing goods as it forms the base for assessing duty and VAT. It is the cost (or value) of the goods plus shipping costs. So if you bought a boat and had it trucked into the UK the landed cost would include the purchase price plus cost of cranage and maybe cradle, trucking and any associated agents fees to get it to the point of importation.

It also has a more general meaning being the cost of getting the boat from where you bought it to where you want to use it. That was what I was hinting at earlier. People might bitch about paying VAT but it could well be that the purchase cost is low enough that even paying transport and VAT your total cost could be less than you could get an equivalent boat locally. This is likely to be true of some niche boats in Scandinavia where the local price is low and you can't buy similar boats in the UK. For a time it was also true of certain types of boats imported from the US, but this market has been killed by the difficulty of getting such boats certified in Europe plus the fall in the value of the £. Not helped by the boats now being old and lower value so the cost of shipping, VAT and certification is disproportionate to the value.

 

[michael_w]

If you pay the UK VAT does the boat still retain it's EU VAT paid status? I'm considering buying an Irish boat.

 

[Nick C]

Thanks for all the very helpful replies. I will compare UK with EU prices with the VAT. As some say with current costs in the UK it may still be comparable and opens the potential to look at a much bigger pool.

thanks again and especially Tranona

 

[Tranona]

If you pay the UK VAT does the boat still retain it's EU VAT paid status? I'm considering buying an Irish boat.

Yes it does according to the agreement, but to retain it you need to use the RGR rules and it is unclear how each state will actually operationalise these. However, if you sell it in the UK the status is potentially lost as the new owning would not be eligible for RGR and if you sell it in the EU thee new owner will not be able to claim RGR in the UK, but will have to use TA to visit as UK paid status will be lost.

 

[st599]

Thanks for all the very helpful replies. I will compare UK with EU prices with the VAT. As some say with current costs in the UK it may still be comparable and opens the potential to look at a much bigger pool.

thanks again and especially Tranona

The VAT is due on the value + shipping/agents fees etc, not the cost + shipping/agents fees etc. HMRC could (and quite often do) evaluate the value as higher than what you paid for it when you import. You then have to prove them wrong.

 

[Tranona]

The VAT is due on the value + shipping/agents fees etc, not the cost + shipping/agents fees etc. HMRC could (and quite often do) evaluate the value as higher than what you paid for it when you import. You then have to prove them wrong.

If you have just purchased the boat, then what you paid is the market value (assuming you are honest). While HMRC has the option to place their own value on the boat they would find it difficult to argue if you had evidence such as the listing of the boat, surveyors report and perhaps some comparables. There are other issues to consider, for example if you had work done at extra cost after purchase but before import they may well want to include this, but on the other hand if you had owned and used the boat for some time before importations you could argue for a lower value reflecting depreciation.