Buying yacht kit VAT free.

AndrewB

AndrewB

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While I'm in England I want to buy some yacht parts to take back with me to the yacht in the Caribbean. The yacht is British registered but unlikely ever to return to the EU.

It would save several hundred pounds if I could avoid VAT. Can this be done, and if so what are the procedures?

The company I'm dealing with seem very dim about this. They admit VAT would not be chargeable if they mailed the parts out, but don't know the rules if I collect for immediate export, in order to avoid the cost (and risks) of sending the parts by post.
 
If they are parts that are available worldwide suggest you come to the Caribbean island of St Maartens, which not only prices in US Dollars(Much Cheaper than UK prices) is also a tax free haven! We reckon that we were paying dollars for pounds when we stocked by there last year, a huge saving. very good chandleries and support services.
 
Sorry to dissapoint you, but if you are UK resident then we would have to charge VAT even if we shipped direct to some remote country outside the EU. Even if the boat will be outside the EU for several years its the customer that it counts for.

But if we don't ask where the customer is resident and the goods are shipped outside the EU we don't have to charge VAT...VAT rules are a bit vague on this one...UK resident ordering parts to overseas address!

Some vessels are exempt if parts are for propulsion systems etc..these are vessels over 15 tons and not adapted for liesure use.

You can get the VAT back, If you personally are going to be outside the EU for more than 12 months. In this case we can refund the VAT if you provide evidence that the parts have left the EU within 3 months of purchase. We would provide a form for this to be signed at the airport. In this case we go by a decleration that you make saying you will be gone for more than 12 months.
 
I supply computer software to calculate customs duty and VAT for most southeran african countries and the application of VAT to goods purcharsed is the same in most countries around the world that cnarge VAT .

I am originally from the UK so I have keept up the the UK's customs procedures

The general prinsipal is that VAT is charged in the country of consumption.

When I come to the UK in 2005 I purchased goods from registered suppliers who complete a form allowing me to reclaim VAT after I have left the UK by getting customs to comfirm export as you say. In the importing country VAT would be paid at the rate of that country. i.e I reclain UK vat at 17.5 % and pay South African VAT at 14%.

The problem is that most UK registered suppliers charge a service fee which is as much as the VAT in the first place so what is the point. I have also had suppliers who when I send the completed form back just do not refund the VAT just pocket it

There can be loop holes for ships who can have goods supplied and customs cleared as ships stores. Cruse ships and aircraft do not pay vat on there supplies and thus can sell "VAT free" once outside "3 mile" limit or what ever it is now in the EU

VAT does not depend on your country of residence but the country of consumption

I think the UK VAT refumd system is wrong and prone to fraud.

In South Africa you get your VAT back direct from customs once you have checked in on your flight which I think is a much better system.

My advice is NOT to buy from the UK if you dont have to, boat jumbles are OK as most sales are VAT free anyway, buy from USA and get shipped out of state then no state tax is charged and UPS or USPS are very cheep for shipping. If you do this watch for suppliers who have shops in multiple states
 
[ QUOTE ]
Sorry to dissapoint you, but if you are UK resident then we would have to charge VAT even if we shipped direct to some remote country outside the EU. Even if the boat will be outside the EU for several years its the customer that it counts for.

[/ QUOTE ]I'm surprised by this. From previous answers on this board, I'd gathered that it is possible to buy a whole yacht for VAT-free export, provided it is taken out of the EU within the prescribed time limit. In that case, why not parts?

My residency is a bit ambiguous. I retain a registered address in the UK, and am not entitled to one anywhere else. But, de facto, I only return to Europe for less than a month each year.
 
This is only the advice we have recieved from the VAT office in the last couple of months, reference selling spare parts for a motor boat based abroad, but supplying to a customer whilst in the UK. He would have to sign a declaration to say he would be non resident for not less than 12 months. We have also been advised that if we have an order from abroad we can supply and ship without VAT and don't have to ask the residency of the buyer.....so the same part going to the same customer could be interpreted two different ways....I'm currently waiting on clarifdication from C&E......
 
The general rules are if you supply to someone "while in the UK" and they take the goods away with them you must charge VAT and supply then with the form to allow you to refund them the VAT once the form is returned to you signed by customs confirming he has exported the goods.

I did that last sept when I left the UK to returm to the RSA.

If you ship the goods overseas (export) no VAT is charged. The residance of the person is not important

If you supply with out charging him VAT and he takes the goods with him then customs are giving you some leway if he is non resident and confirms the fact. They assume as he is non resident that he will export the goods. This is a big loop hole as I then could buy goods, not pay VAT as I am non residant, sign a declaration to say I would be non resident for not less than 12 months and give goods to anyone while I was in the UK. Customs would have no conformation the goods had left the UK.

Last sept I purchased some goods from a company in Bristol and they delivered directlly to a shipping agent I was using to transport to RSA, the firm in Bristol had a copy of the shipping docs to south africa from my shipping agent to cover them with the VAT man.

With regard to yachts purchased VAT free, these will be registered in another country and like a visiting yacht are allowed to stay for a time normally 6 months to a year else the VAT and may be duty must be paid.

I have a frend who was/is resident in RSA and purchased a MAXAM Cat simular to Stingo and registered it in Belize and still had not left South Africa after 3 years and got nailed by the VAT man. He has now left and sailing the Indian Ocean. 'Lucky S*d'

So get to know the rules and do consider the VAT man is there to collect as much money for the goverment as possible !!!

As I soid before being in this industry I tend to know what can and cannot be done and the lookholes from bath custims side and the exporter/importers side

Hope no one from Customs is reading this as I might have to watchout next time i am in the UK
 
This squares with my understanding, following purchases by a family member normally resident abroad.
He had to take his forms to Customs at port of departure to claim for the refund of VAT.
They do not make the process easy!
It took some time to find the airport customs office, then more time to find someone to take the form.
Luckily this was a practiced procedure and enough time was left to catch the flight.
 
I have to disagree with your interpretation of the residency requirement although your second reply seems to clarify it a bit better.

I used to send goods worldwide on a small scale, often to UK residents with vessels abroad. In very simple terms, the only requirement for zero rating for VAT (exporting outside EU) is that the exporter can prove to HM Revenue and Customs that the goods were indeed exported and within the relevant timescale. The exporter may need several documents to prove this but copies of commercial invoices and certified waybills from couriers should suffice. Couriers should also confirm in writing to the exporter that the goods were exported once they have left the country.

The exporter could use the same system for supplying a customer direct from his premises but again he would need to be able to prove the goods were exported in the relevant timescale. This proof needs to be much more detailed than for commercial couriers and would rely on the customer supplying full details of the export method. I doubt if any business would take this risk. If the exporter can’t prove that export took place, he is liable for the VAT. Ouch! There are two alternatives that can be taken. Either the customer pays the VAT and claims it back at/after export or the exporter keeps a deposit equal to the VAT and waits for proof of export to be supplied.

I do agree with you that VAT rules can get very confusing and I was always worried that I would make some very expensive blunder!
 
Thanks to everyone for these most helpful replies. I have dumped the company that refused to co-operate, obviously a £2,000 order wasn't worth the bother of trying to help a customer. Other companies have had no trouble issuing a VAT form 407 so we can reclaim VAT when we leave UK (thanks for that, js48). I've taken note of Gordonmc's warning to expect delays with customs.

(Oh and PS, honest I am just a hard-up yachtie trying to save a buck, definitely NOT responsible for a £40m VAT scam!)
 
I'm doing the same when I visit the in-laws this August. Yacht Parts in Plymouth will happily supply the VAT refund form (and are offering a decent discount too).

One thing I have found out the hard way in the past, is that the VAT refund points at Heathrow (Terminals 3 & 4 for sure) require that they sight the items that you are (re)exporting. This requires that you state at the check in counter that you will need to claim a VAT refund on items in your checked luggage or that these items will be in your hand luggage. You then drag your luggage through to the custom/VAT refund point, show them what you're taking out of the UK, have them stamp the form, deposit it in their little post box thingy, drag it all back to the check in counter, and check it all in. I find it easier to check in all the hand luggage and carry everything I want to claim on (3x7KG in my families case), but have endured the above on more than one occasion.

In Oz, the check in counter staff will happily look at what you are going to claim for and state on your boarding pass that they have seen the item(s). Not so in the UK as far as my experience has been.

The VAT refund process works well when ordering from overseas BUT you loose out on shipping. 30KG's of baggage allowance (most airlines have a 10KG discretionary allowance in addition to the standard 20KG) is a LOT of nice gleaming new hardware and well worth turning up an hour or two before the masses.

Apologies in advance if the subject has been resolved.

Cheers, PT.
 
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