buying from Channel Islands?

[z1ppy]

Morning,

Does anyone have any experience of buying a boat (second hand) in the Channel Islands and bringing it back to UK?

Boat was built in the UK and UK VAT paid at point of original purchase (with evidence to confirm this) registered with a SSR then taken to Channel islands where it is now for sale.

I believe this should not present a problem as UK VAT has been paid and this can be proved so my thinking... its no different to buying the boat if it were lying in UK?

Thanks in advance.
Howard

 

[jimg]

Deleted

 

[Scarron]

Yes I have done it with a much older (1969) boat and had no problems ( I have UK yard bills from the critical 1992? VAT date. With the paperwork you have available it sounds absolutely fine. That being said no one stopped me coming through UK customs anyway, I don't think they are particularly interested..

What are you going to replace the Cougar with, it'll need some go otherwise you'll get bored.

 

[yesod]

ensure the purchase takes place in europe otherwise vat will again be due on the re-import.

 

[z1ppy]

What are you going to replace the Cougar with, it'll need some go otherwise you'll get bored.

there will be plenty of that for sure!

ensure the purchase takes place in europe otherwise vat will again be due on the re-import.

interesting... is Guernsey part of Europe? assume it must be although under different tax control??

We are talking about a 2005 boat here will all paperwork to prove UK VAT paid at original purchase.

 

[yesod]

tinteresting... is Guernsey part of Europe? assume it must be although under different tax control??

We are talking about a 2005 boat here will all paperwork to prove UK VAT paid at original purchase.

uk vat may have been paid at purchase, but if the boat changes hands outside of the eu, then it loses that status. it needs to be re-imported by the person who exported for the vat-paid status to be kept.

now whether any of this would ever be checked is another matter.

 

[Nautibusiness]

uk vat may have been paid at purchase, but if the boat changes hands outside of the eu, then it loses that status. it needs to be re-imported by the person who exported for the vat-paid status to be kept.

now whether any of this would ever be checked is another matter.

Important point, well noted!

 

[z1ppy]

uk vat may have been paid at purchase, but if the boat changes hands outside of the eu, then it loses that status. it needs to be re-imported by the person who exported for the vat-paid status to be kept.

now whether any of this would ever be checked is another matter.

Indeed it is a good point.

My understanding now is that if we were to purchase a boat lying in the channel islands, unless the "transaction was completed" in a EU country the boat would loose its VAT paid status and therefore be liable for VAT on return to UK.

This in effect would be obvious as the Bill of Sale would show a CI address as the vendor / previous owner and therefore make it clear on inspection that VAT would be due after the date of purchase, for which the original invoices would not cover...

Think we may need to go back to the drawing board here...

 

[DAKA]

Technically once a VAT paid boat has been outside EU country for over 3 years then the VAT is due on re import to any eu country at their rate of vat.

If you manage to smuggle it in then the chances of ever being caught are remote however technically its wrong and you have to decide if you are going to risk forum advice and most likely get away with it or if you are going to speak to HMR&C .(3.4 3.5)

 

[jfm]

Yup, for it to be reimported into the UK VAT free the person who exported it must import it (or his agent, who could be you). There is a 3 year rule too as Daka says, though iirc that is vague and exists more in HMRC's guidance note than in law (please advise if it's even relevant otherwise it's not worth researching).

So, strictly speaking, you are indeed back to the d/board. All that said, the enforcement of this is not strong.

 

[jfm]

This in effect would be obvious as the Bill of Sale would show a CI address as the vendor / previous owner and therefore make it clear on inspection that VAT would be due after the date of purchase, for which the original invoices would not cover...

I dont agree your logic here. It is entirely possible for you to contract, in CI, with Mr CI owner to buy the boat, with delivery stated in contract as UK. You can pay deposit to him in CI or even the full price. Then he (or his agent) and you sail it to UK and he then hands over the BoS or orders you to release it from escrow, and he hands over the keys, and says "here it is" and you sign a physical receipt note. That is then VAT free (ignoring the 3 year rule which we should only look at if relevant)

The existence of a CI name/address has no bearing on the VAT. What matters is who the evidence tells us physically reimported it to UK

Ideally do the correct forms. C1331? - I can't remeebr exactly the name. See the export C1331 before you buy the boat and file the reimport C1331 when the boat comes back to UK

 

[Bandit]

Assuming Vendor A in Uk sold to Purchaser B who is a channel islands resident and the sale took place in EU not CI and at time of sale B sells to UK purchaser C and the sale takes place in the EU ie for practical purposes France or UK then it should be OK.

A good CI broker should know this one.

I understand there could be problems if the EU sale point is broken ie if CI res B sells to X who is another CI Resident and sale takes place in CI and then X sells to C a UK Resident.

 

[Tranona]

Whichever way you look at it, the boat will be liable for VAT on re entry into UK - unless the current owner is an EU resident, returns the boat to the EU and then sells it to another EU resident. If he is not an EU resident then VAT is due. If he is an EU resident, but sells the boat in CI, even to another EU resident it is liable for VAT if the new owner re-imports it. All very clear in HMRC notice No8.

The "3 year rule" is related to boats leaving the EU and then later being brought back by the same person. I understand it is for guidance and can be varied. There are obvious ways of avoiding the 3 years if the boat is kept somewhere near the EU, for example in Croatia or Turkey or even CI as regular visits to EU will likely restart the clock - but only for the same owner.

I am sure there are many ex CI boats here that have never paid VAT on importation - in fact I know somebody who owns one. However, failing to pay is an offence and the liability I understand stays with the boat as well. So, although when selling on to another EU resident no VAT is involved, the original offence will still stand.

Not sure I would want to be the person who tested out the robustness of this legislation!

 

[DAKA]

Not sure I would want to be the person who tested out the robustness of this legislation!

For once we are in full agreement

I would be speaking to HMR&C without doubt, I spoke to them when I left my boat in CI for a year just to be on the safe side and agreed extension to C1331 (Im sure thats not technically correct term but they knew what was going on so I couldnt be stung for VAT on my own boat)

If anyone thinks its alright to smuggle a boat where would they draw the line between that and a bit of wacky backy to cover the fuel .

 

[jfm]

Whichever way you look at it, the boat will be liable for VAT on re entry into UK - unless the current owner is an EU resident, returns the boat to the EU and then sells it to another EU resident. If he is not an EU resident then VAT is due.

Happy to be corrected Tranona, but I can't immediately see why the non EU residence of the guy is relevant. I would think anyone, whether an EU resident or not, could own VAT-paid goods in the UK, then export them, then re-import tham, and still get RGR on the reimportation so as not to have to pay VAT.

The "3 year rule" is related to boats leaving the EU and then later being brought back by the same person. I understand it is for guidance and can be varied.

It's not that vague Tranona. There is a list of circumstances in which the 3 year period can be extended and that's it. You have to claim the extension using specific CPC codes on the import documentation. A boat just used for pleasure by the owner outside the EU for >3yrs is unlikely to meet the conditions for a time extension but it always depends on the detail

 

[jfm]

I would be speaking to HMR&C without doubt,

Beware. Often they will not know the correct answer to a non-simple qustion, and if they give you the wrong answer you will have great difficulty holding them to it later. Tax experts do not work in call centres. Much better to ask on this forum.

 

[z1ppy]

Interesting stuff..

I have taken some expert guidance on this and its all shades of grey!

In reality i am sure there are many boats that are in this position and nothing every happens. The problem is i dont want to afford to be stuck with a VAT bill of 20% on re importation to UK, nor do i want any vat paid status disputes if we buy and when we come to sell the boat.

i think there is a solution to the VAT paid status in this instance but just checking 100 %... next question... is this the boat we want!!

 

[DAKA]

Beware. Often they will not know the correct answer to a non-simple qustion, and if they give you the wrong answer you will have great difficulty holding them to it later. Tax experts do not work in call centres. Much better to ask on this forum.

Happy to accept your comment now you and Tranona are involved, originally I thought the thread was heading in a scary direction but I could have misinterpreted it.

At least if teh op makes contact with HMR&C yacht division (completes c1331 ) they couldnt be prosecuted for illegally smuggling even if they get nobbled for tax (that is most likely due and been forewarned anyway.)

 

[Tranona]

Happy to be corrected Tranona, but I can't immediately see why the non EU residence of the guy is relevant. I would think anyone, whether an EU resident or not, could own VAT-paid goods in the UK, then export them, then re-import tham, and still get RGR on the reimportation so as not to have to pay VAT.

Yes, I was making a leap too far, assuming that the no EU resident would not have been the person who exported the boat. One can imagine all kinds of permutations once you move away from the simple same person takes out and brings back.

 

[blackhaddock]

If i took my VAT paid boat from the UK to Jersey and left it there for four years.
Then returned back to the UK after those four years.

Is the forum saying that VAT would be chargable once again.