Buying in Europe

[GTom]

Fingers crossed, waiting the end of the month for the deadline. Due to a repair job I've given up on bringing the boat across the pond to save the VAT status but if it's the end of the year eventually, then it won't be an issue.

I wonder how long HMRC will provide T2L documents for yachties and what will be the reaction of the T2L "addicted" customs offices in the Med to Brexit...

 

[Baggywrinkle]

If, for example, you were stopped today and questioned about your length of stay, the relevant period would be the past 180 days ending today.

In your question, if you stayed for 1 day ( 1st January ), the last day of the relevant 180 day period in which that day would be included would be 1st April. You would now have another 90 days commencing 2nd April and ending 30th June.

If you return on 1st September, the previous 180 day period ending on that day would have started on 2nd June. However, you have already stayed 28 days in June so, starting from 2nd September you would have 62 days stay left which takes you to 3rd November.

All this assumes that your periods of stay are not interrupted.

If I may, can I advise that it would be unwise to plan on leaving on the 90th day. Any unforeseen event might cause a delay leading to arrest as an illegal immigrant!

Bit in bold above .... I would have thought that the last day of the 180 day period in which the 1st Jan would be included would be 1st Jan + 180 days - around 6 months later - 29th of June or thereabouts. (Jan, 31 days + Feb, 28 days + Mar, 31 days + Apr, 30 days + May, 31 days + 29 days in June takes it up to 180 days total.) ... so the last day for which a stay on 1st Jan is relevant is the 29th June.

My understanding is that you are only allowed 90 days stay in the last 180 days, so they go back 180 days and count up all the days you've been in the Schengen area - if that totals more than 90 days then you are in violation of the visa-free tourist rules.

 

[Graham376]

I wonder how long HMRC will provide T2L documents for yachties and what will be the reaction of the T2L "addicted" customs offices in the Med to Brexit...

Who knows what they will do? The T2L states the goods are OK for circulation in the EU (at the present time) and some officials interpret it as VAT status paid, which isn't actually correct. As long as you can prove the boat is in EU customs territory when we exit, then it "may" still be valid. I hear some owners are busy with DTP software

 

[RupertW]

Who knows what they will do? The T2L states the goods are OK for circulation in the EU (at the present time) and some officials interpret it as VAT status paid, which isn't actually correct. As long as you can prove the boat is in EU customs territory when we exit, then it "may" still be valid. I hear some owners are busy with DTP software

The T2L is much quoted but I’ve seen no evidence that it’s more than a red herring. The only real evidence is the EU confirmation that in the event of a no deal (or a deal containing no special provisions for yachts) then a VAT paid boat will remain EU VAT paid only if it is inEurope on the day of the no deal or transition period end. The T2L is not relevant in that ruling.

 

[Graham376]

The T2L is much quoted but I’ve seen no evidence that it’s more than a red herring. The only real evidence is the EU confirmation that in the event of a no deal (or a deal containing no special provisions for yachts) then a VAT paid boat will remain EU VAT paid only if it is inEurope on the day of the no deal or transition period end. The T2L is not relevant in that ruling.

As you say, a VAT paid boat will retain its status if within EU waters when we exit. The point is that owners will still have to be able to provide evidence that VAT has been paid, as they may be asked to do now. T2L is not a red herring as some countries, Portugal being one, require it. What we don't know is whether they will still recognise a T2L issued prior to Brexit as still valid afterwards.

 

[Bobc]

My understanding is that if you buy a boat in the EU today and have proof of EU VAT being paid, then you are fine for keeping it in the EU indefinitely (no need for a T2), and if you bring it to the UK even after the end of the transition, it will be deemed as UK VAT paid, as you are allowed to re-repatriate any personal items from the EU without paying UK VAT (so long as EU VAT was paid).

 

[Graham376]

My understanding is that if you buy a boat in the EU today and have proof of EU VAT being paid, then you are fine for keeping it in the EU indefinitely (no need for a T2), and if you bring it to the UK even after the end of the transition, it will be deemed as UK VAT paid, as you are allowed to re-repatriate any personal items from the EU without paying UK VAT (so long as EU VAT was paid).

Returned Goods Relief after Brexit will only apply to VAT paid goods you personally have taken out of the UK. There are I think different rules for ex pats returning to the UK with their household goods.

 

[JohnGC]

For Schengen visits this is helpful.
Schengen-calculator

My understanding is that it is a "count-back" method of calculation.

If you are in (or plan to be in) a Schengen country on a particular date; then count the total number of days you where in any Schengen country in the previous 180 days. If it's less than 90 then your OK.

 

[ANDY_W]

Bit in bold above .... I would have thought that the last day of the 180 day period in which the 1st Jan would be included would be 1st Jan + 180 days - around 6 months later - 29th of June or thereabouts. (Jan, 31 days + Feb, 28 days + Mar, 31 days + Apr, 30 days + May, 31 days + 29 days in June takes it up to 180 days total.) ... so the last day for which a stay on 1st Jan is relevant is the 29th June.

My understanding is that you are only allowed 90 days stay in the last 180 days, so they go back 180 days and count up all the days you've been in the Schengen area - if that totals more than 90 days then you are in violation of the visa-free tourist rules.

My thanks to Baggywrinkle for pointing out my error and my apologies to GTom for getting it wrong. For some reason I was working on 90 days for both length of stay and relevant period. No excuse, just a senior moment!
It's doubly annoying since I keep my boat in the Netherlands so, if I leave it there, the 90/180 will be very applicable to me and I should have got it right.

To re-visit the problem, as Baggywrinkle states, the relevant 180 period which includes the 1st January will end on 29th June.
If GTom then returns on 1st April he will have 89 days length of stay remaining which will take him to 28th June.

If he returns on 1st September, the 180 day period ending on that date would commence on 6th March. However, of the 90 days allowed in that period he would have already used 89 days ( 1/4 -- 28/6 ) so would have only one day left.

So the answer to the question is, GTom cannot use all his allowance up to 29th June and then return for " a few weeks " on 1st September.

 

[st599]

I'm certainly not sure, from what I've read, that the 90 in any 180 would be any different if we left with an agreed deal.
What do others think/read from this ?

Any increase on the 90 in 180 rule would require the UK to reciprocate. The Home Office have taken the view that we wont.

If, for example, you were stopped today and questioned about your length of stay, the relevant period would be the past 180 days ending today.

...

If I may, can I advise that it would be unwise to plan on leaving on the 90th day. Any unforeseen event might cause a delay leading to arrest as an illegal immigrant!

You won't need to be stopped. It's all automatic when your passport gets scanned. One of the big questions for crew changes, delivery trips etc. is if you've started the 90 day clock by arriving on a plane/ferry, how do you clock out of the country or, how do you clock in if you're entering by yacht?

The answer seems to be country dependant, the UK is building some amazing smartphone app which will be used to report arrival at the 12 mile limit and in to which you'll need to input the HMRC VAT code of everything on the boat, for France you will need to enter and exit via a Port of Entry and visit the immigration and customs offices.

An American at our club overstayed because his flight was cancelled - 2 year ban from re-entering Schengen - so yes, don't plan on traveling on the 90th day.

 

[Baggywrinkle]

There seems to still be a bit of confusion as to the anticipated rules concerning VAT, duty and Travel post-Brexit. I experienced the whole process already when Croatia acceeded to the EU and Brexit is simply the reversal of this process (with the assumption that the UK government achieve no freedom of movement or goods and no customs union).

So .....

When Croatia joined the EU my boat was in Pula and was not VAT paid. The act of Croatia acceeding to the EU caused a chargeable event (an import) of my boat into the EU - even though the boat remained stationary and never physically crossed a border - normally, this would mean both import duty and VAT become due.

During the accession I was the owner of the boat, both before and after, so I effectively imported the boat to the EU BUT due to the EU accession rules I only had to pay a small import charge and the VAT payment was waived due to the boat being over 8 years old on the date of accession. If it had been under 8 years old I would have had to pay VAT at the Croatian rate. (Croatia actually ran a special process where VAT on pleasurecraft was reduced to 5% in the run-up to accession - it would normally have been 25%).

After a bit of paperwork (involving boat photos, value assessment, proof of ownership, proof of age etc. etc.) and a visit to a Notar in Croatia I got the necessary papers to show that the boat was VAT paid and now had the status of EU goods (Union Goods).

Brexit will effectively be the reverse of this process.

As I understand it, there will be a date on which Brexit happens (B-Day) - my understanding is that this date is the end of the transition period but it may be the 31st Jan - I don't know.

Currently any VAT paid boat in the UK or EU27 is Union Goods - which means it can move unhindered throughout the EU 28 without incurring any chargeable events like import duties or VAT.

When the UK leaves the EU, Union Goods will be split between the Union and UK dependent on their location when Brexit comes into effect (B-Day).

Those in the EU will remain Union Goods and will be free to circulate within the remaining EU27 but not in the UK - regardless of flag state.

Those in the UK will become UK goods and will be free to circulate in the UK but not the EU 27 - regardless of flag state.

If you are a UK citizen with a boat in the EU27 on the date of Brexit then your VAT paid boat will remain Union Goods and will be free to circulate in the EU27.

If it remains in your ownership and is not re-fitted or improved, then when you return it to the UK (it cannot change ownership), subject to the current published HMRC rules, the boat will qualify for returning goods relief - so no VAT will be charged and it will become UK Goods after the re-import.

Because the UK left the EU28 and became a seperate customs and excise area then Brexit is effectively an export from the UK, even though the boat in the EU didn't move anywhere. If intending to re-import the boat to the UK at a later date I am not sure if HMRC need notification that you have a boat abroad or not, it might help with the re-import or alternatively, paperwork showing VAT status, ownership, and location in the EU on B-Day might well be enough.

After Brexit and assuming the UK government keep their red flags - no customs union, no freedom of movement - then UK boats (UK goods) will still be able to visit and reside in the EU 27 but under temporary import rules (18 month stay). This means checking in and out at ports of entry and keeping a paper trail of the dates so no chargeable event takes place due to an overstay. The 18 month clock can be reset by clearing out of an EU27 country and clearing back in again - which starts a new 18 month temporary import. I used to have to do this with my non-VAT paid boat in Croatia and it can be done in a day.

On top of this, again assuming the UK government keep their red flags - no customs union, no freedom of movement - then the 90 days in 180 rule for visiting the Schengen area also applies - so make sure that you have enough time in the EU left on your 90 day allowance when the 18 month temporary import ends - otherwise you will not be able to visit the boat and reset the temporary import - you will then be charged EU import duty and VAT unless you make arrangements for someone else to do the procedure.

Supporting info for the verbiage above .....

EU Commission confirms RYA thinking on Returned Goods Relief
Brexit | Brexit | Current Affairs | Knowledge & Advice | RYA - Royal Yachting Association

Ex-pat UK owners that can demonstrate previous UK VPS on returning to the UK can have import VAT relieved under Returned Goods Relief (RGR) subject to the following conditions:
o Imported normally within three years of its export (although HMRC are very flexible on this – we have seen one allowed RGR after seven years)
o Imported by the same person who exported it
o The vessel has undergone no more than normal running repairs, maintenance etc (i.e. not works to increase the value)

Brexit latest VAT Paid Status on Recreational Craft in the event of a 'no deal' Brexit

Union Status Boats In The UK At B-Time

EU guidance states that if a boat is in the UK or within UK territorial waters at the point in time when the UK leaves the EU and there is ‘no deal’, the boat will assume UK Status but will lose its Union Status.

Can A Boat Without Union Status Then Be Taken To The EU27?

In the event of a ‘no deal’ Brexit a UK registered boat which does not have Union Status will be able to travel into and around the EU27 under Temporary Admission (TA) arrangements, subject to conditions.

Boats that are registered, owned and in use of persons from outside the EU that do not have Union Status can use TA for a continuous period of up to 18 months within the EU27, whereupon they are required to leave – although re-entry under TA can be made almost immediately.

However, if the boat is to remain within the EU27 beyond the continuous 18m period, possibly for sale or change in residency, or if the boat is to be used for commercial purposes the boat will require importation and payment of VAT (and where necessary, Duty) at the relevant rate. This will apply even if EU VAT has been paid previously, but where the boat was in the UK at B-Time.

Will A UK Boat Lying In The EU27 BE Subject To VAT (and Duty) When returning To The UK?

UK HMRC have advised that plans have been made to replicate and adopt into UK domestic law the existing RGR rules, which will allow UK residents returning to the UK with their boats post-Brexit relief from VAT (and Duty), providing the rules above (substituting UK for EU) have been met. Further, HMRC have stated that they will consider the boat to have UK Status provided the owner can demonstrate:

• The boat was acquired pre-Brexit
• Evidence of VAT paid either in the UK or the EU27 pre-Brexit
• The boat was in the EU27 at B-Date

Non-UK owners will of course be entitled to use their boats within the UK and UK territorial waters under the same TA rules that apply within the EU27, but if the vessel is to be used commercially or imported into the UK (e.g. for sale) UK VAT (and Duty) may become due, irrespective of the boat’s pre-existing Union Status.

VAT, a No-Deal Brexit and the obvious question – the Berthon view - Berthon

 

[Graham376]

The 18 month clock can be reset by clearing out of an EU27 country and clearing back in again - which starts a new 18 month temporary import. I used to have to do this with my non-VAT paid boat in Croatia and it can be done in a day.

Shouldn't this be out of the EU Customs Territory?