Buying a vat paid boat registered in Guernsey to UK

[Blue Fin 2]

Hi all,

I'm after some advise if possible, looking to buy a boat that is advertised by a uk broker as VAT PAID, the boat is registered part 1 in Guernsey owner is a C.I resident, if i buy this boat, what liabilities would i expect to pay, i.e is VAT paid meaning no further VAT is liable on purchase/ transfer from C.I to UK? the boat could have potentially been a uk boat when new and vat paid then but not confirmed, just shows on advert as VAT PAID.

Would this be liable to import tax to to the UK - boat is 12.5m, 19tons gross and purchase price of £145k so potentially some large additional bills could be the deal breaker, broker so far not overly helpful and i've not viewed the boat yet due to distance but intend to later this week.

Has anyone got any other experiences or issues to bear in mind?

I intend to re register the vessel to UK waters (assuming proof of vat paid previously is available otherwise the sale may not go ahead as it's top end of the budget). i believe this to be around £2,500?

Thanks!

 

[Tranona]

Welcome to the forum

First of all flag of registration is irrelevant for VAT purposes. CIs are not in the UK Custom area so you will need to import the boat and pay VAT on entry. It is also irrelevant whether VAT was paid some time in the past as VAT is a tax on transactions NOT on the asset (boat) so liability depends on the facts of the transaction. Importing a boat from outside the customs area is a "chargeable event" and VAT is payable on the market value of the boat unless you qualify for one of the reliefs - and from what you say no relief is available on this transaction.

This has always been the case for boats coming from the CIs whether it was into the EU prior to Brexit or now into the UK.

It is misleading to say the boat is "VAT Paid" - it lost that when it left the UK?EU and was imported into the CIs. The only chance of retaining that status is if the vendor (even if he is a CI resident) was the person who took it out of the UK s/he could bring it back in claiming Returned Goods Relief. He could then sell it to you in the UK without paying VAT. If however it has changed ownership outside the UK then that relief is not available.

As ever it is the details that matter in each individual situation.

 

[Blue Fin 2]

Hi Tranona,

Thankyou very much for getting back on this and it is along the lines of what we suspected although as you say each individual situation is different, as the advertisement says VAT included (if genuine and referring to this sale not previous status) and it is for sale in the UK through a UK broker, the only hope here is it is genuinely for sale at the price including the VAT being paid on point of sale which would mean a sale with us

As i said the broker is not very helpful over the phone and we have a long distance to travel to see the boat and documentation so just thought i would throw out the question on here.

Online searches just throw up various things which contradict each other as circumstances will vary. We will try to obtain more information through HMRC as well as RYA and MCA but I'm sure some time will pass before a response is forthcoming and if going for this we are required to commit to it very shortly and ultimately do not want to be hit with any substantial bills after point of sale regards import VAT etc. Other costs with boat ownership are something we all experience

Cheers.

 

[Sticky Fingers]

@Blue Fin 2 I'd echo what Tranona has said.

In your shoes, and knowing the potential for incorrect VAT status definitely exists in this scenario, I'd want the broker to provide documentary proof that UK VAT is indeed paid and the boat retains its UK-VAT-paid status, and that VAT will not become due on reimport. If they cannot, then you must assume that you will be liable for VAT on import, a not insignificant sum of money that you could factor into your offer price assuming you were to proceed.

 

[Blue Fin 2]

Many thanks to you for further confirmation on our suspicion, we're going to view it and witness the paperwork being supplied to form the sale as it could be all OK but without solid evidence we will not proceed.

Will report back in a few days hopefully to help others that may encounter this in future.

 

[j24jam]

@Blue Fin 2 I'd echo what Tranona has said.

In your shoes, and knowing the potential for incorrect VAT status definitely exists in this scenario, I'd want the broker to provide documentary proof that UK VAT is indeed paid and the boat retains its UK-VAT-paid status, and that VAT will not become due on reimport. If they cannot, then you must assume that you will be liable for VAT on import, a not insignificant sum of money that you could factor into your offer price assuming you were to proceed.

If it is advertised as VAT paid, we should probably assume that the boat is UK VAT paid, and would qualify for RGR under the current ownership.

To qualify for RGR:
- the boat cannot of had a change of ownership outside since export from UK
- the owner must be able to demonstrate the boat was in the UK under his ownership previously, and was in free circulation in UK
- the boat cannot of undergone anything more than routine maintenance outside of the UK

As such the sale would have to take place in the UK to retain the UK VAT paid status. The seller would be importing the boat to the UK, not the buyer.

 

[billskip]

Maybe somebody is working on the " nobody knows the boat is out of the UK " be careful...

 

[Irish Rover]

The OP says "advertisement says VAT included and it is for sale in the UK through a UK broker." I take that to mean the boat is currently in the UK and, if that is so, then I can't see how there can be a VAT issue.

 

[j24jam]

The OP says "advertisement says VAT included and it is for sale in the UK through a UK broker." I take that to mean the boat is currently in the UK and, if that is so, then I can't see how there can be a VAT issue.

Good spot. I'd missed that.

Yes, so if the boats in the UK, then you just want to be sure their is evidence of UK VAT paid status (by way of original VAT invoice for the boat ) and that the boat was in the UK at the end of the Brexit transition period, and has not changed hands outside of the UK since (or outside of the UK/ EU pre-brexit transition).

The broker should have a handle on this and be able to get the vendor to provide the required evidence.

 

[Tranona]

www.gov.uk/guidance/sailing-a-pleasure-craft-that-is-arriving-in-the-uk This is the official guidance from HMRC. Covers much of what has been said about the process. You will find buried in there a contact for the special HMRC unit in Portsmouth that deals with Pleasure Craft imports.

In terms of documents, the transcript from the registry will show the trail of owners and tell you when the seller bought the boat and from whom. The critical date you need to ask about is when it left the UK (and under whose ownership). This will tell you whether RGR relief is possible. It would also be useful to have a copy of the original invoice with VAT payment, although not essential if it is an older boat with a long history of time in the UK before leaving.

If this shows it does potentially have UK VAT paid status then the seller has to physically return the boat to the UK (if it is not already here) with confirmation from customs on entry and then complete the sale to you in the UK. If it does not qualify then the seller will have to complete the import, pay all costs including VAT before he sells to you. If the broker is any good he should know all this and make all the necessary arrangements. Clearly if you get that far the purchase contract should lay out clearly what is required and who is responsible so that you get clear title and proven status.

On registration. There is no need to re-register on the UK register. CI registration is fully acceptable for use anywhere in the world you might want to go. It is unconnected with VAT status - just a register of flag state and importantly title.

Good luck

 

[billskip]

and it is for sale in the UK

I know I'm old and doddery...but I can't see where it says that...why is he going to view it in the CI then?

 

[madabouttheboat]

On registration. There is no need to re-register on the UK register. CI registration is fully acceptable for use anywhere in the world you might want to go. It is unconnected with VAT status - just a register of flag state and importantly title.

While that is correct, UK customs are more likely to express an interest in a boat, VAT wise, if it has a Channel Island on the back, as there is perhaps a bigger chance that it could be an illegal import. Personally I would stick it on the SSR (for £35 or whatever it is now) and remove Jersey/Guernsey from the transom.

 

[Tranona]

I know I'm old and doddery...but I can't see where it says that...why is he going to view it in the CI then?

You are right - posts 1&3 are contradictory which is why I phrased my post#10 to cover both eventualities.

 

[billskip]

I know I'm old and doddery...but I can't see where it says that...why is he going to view it in the CI then?

@Irish Rover ...Sorry IR..I've read it all again and yes I'm old and doddery...and blind...

 

[Tranona]

While that is correct, UK customs are more likely to express an interest in a boat, VAT wise, if it has a Channel Island on the back, as there is perhaps a bigger chance that it could be an illegal import. Personally I would stick it on the SSR (for £35 or whatever it is now) and remove Jersey/Guernsey from the transom.

Not sure that is the case these days. You can't have the boat on 2 registers and SSR is not a register of title. Personally I would rather have title than worry about any "extra" attention now that ALL boats have to clear customs on entry.

 

[billskip]

You are right - posts 1&3 are contradictory which is why I phrased my post#10 to cover both eventualities.

It confused me ,which as you know is easily done...

 

[Irish Rover]

It confused me ,which as you know is easily done...

Maybe I'm the one who is old and whatever, but I still don't see any clear contradiction in what has been written in #1 and #3. OP doesn't say he's going to view the boat in CI's. He just says there's distance involved. Obviously it would be helpful and very relevant if we knew for sure where the boat is currently located.

 

[billskip]

Many thanks to you for further confirmation on our suspicion, we're going to view it and witness the paperwork being supplied to form the sale as it could be all OK but without solid evidence we will not proceed.

Will report back in a few days hopefully to help others that may encounter this in future.

Where is the boat? In the UK or in the CI's

 

[Tranona]

Maybe I'm the one who is old and whatever, but I still don't see any clear contradiction in what has been written in #1 and #3. OP doesn't say he's going to view the boat in CI's. He just says there's distance involved. Obviously it would be helpful and very relevant if we knew for sure where the boat is currently located.

Post #1 does not say where the boat is located, post#3 says it is in the UK.

Does not change the substance of the problem which is ensuring that there is a clear paper trail that confirms its VAT status - either already existing or created in the course of the transaction.

 

[Irish Rover]

Post #1 does not say where the boat is located, post#3 says it is in the UK.

Does not change the substance of the problem which is ensuring that there is a clear paper trail that confirms its VAT status - either already existing or created in the course of the transaction.

A clear case of the dangers of making assumptions and giving advice without being in possession of the full facts .