Correlation between boatbuilding and politicians

[Clash]

I’m pretty sure that the location where VAT is payable on a boat is dependent on where the boat is purchased and where it will be kept rather than on the passport of the purchaser and that it can be perfectly lawful for a UK citizen to buy a boat that is delivered outside UK and not pay VAT.

There’s also a whole piece to be considered in the context of tax around terms such as ‘domicile’, ‘residence’, ‘belonging’ etc.

However, as I’m happy to accept that I’m not the smartest person in the room, I couldn’t begin to explain exactly how this might be so.

It's pretty simple. If you buy something in the UK while tax resident in the UK you pay UK VAT. Doesn't matter where the goods are delivered. If, for example you bought a boat in the UK and then sailed or motored it to the med, would you expect to have to pay VAT there instead of the UK?

Sellers are obliged to charge VAT unless it is for export in which case it's zero rated. But in order to do that, they have to satisfy HMRC that the goods were sold to a foreign entity and the details of that foreign entity (name, address, etc.) on the invoice clearly show that they are indeed a foreign entity. Either a person or a company.

But then that foreign entity has to declare their purchase and pay any duties and VAT as applicable in their jurisdiction.

 

[stelican]

The solution for uk motorboat builders might perhaps in part be to offer solar panel clad, reverse osmosis , carbon sequestering , wave energy gathering, electric/ chip fat, hybrid powered, tax relief gathering, self propelling floating homes?
And apply for a gumment grant to innovate, research and build them .
And an export license to sell to the world ..

As for Benny, iirc companies that supply ( and re supply) charter markets do well by hurricane devastations..

Well Fairlines new owners have seen the light as this is exactly what the think the market needs.

 

[jfm]

However, as I’m happy to accept that I’m not the smartest person in the room, I couldn’t begin to explain exactly how this might be so.

Nope, you're actually the smartest person in the room bjb imho . MapisM asked a simple enough question and then after ~ the first page this whole thread become a "don't know whether to laugh or cry" job. The 2 main protagonists, Clash and Portofino, write a few sensible points here and there, perhaps 1/3rd, but their other 2/3rds is just garbage imho: economically illiterate, wrong in how the law works, wrong in how yacht sales transactions are even conducted, ignorant even about the ownership of Princess, clueless about how UHNW folks buy things and think about taxes, and out of touch with the ranking of UK boat brands in UHNW eyes, etc .

 

[stelican]

It's pretty simple. If you buy something in the UK while tax resident in the UK you pay UK VAT. Doesn't matter where the goods are delivered. If, for example you bought a boat in the UK and then sailed or motored it to the med, would you expect to have to pay VAT there instead of the UK?

Sellers are obliged to charge VAT unless it is for export in which case it's zero rated. But in order to do that, they have to satisfy HMRC that the goods were sold to a foreign entity and the details of that foreign entity (name, address, etc.) on the invoice clearly show that they are indeed a foreign entity. Either a person or a company.

But then that foreign entity has to declare their purchase and pay any duties and VAT as applicable in their jurisdiction.

Clash.
Regarding VAT. A UK resident is entitled to export a non paid VAT boat from UK for personal for use in EEC.They do not have to pay VAT in those countries provided it is removed from the EEC for 24 hrs minimum every 18 month.
UK VAT is payable should boat return to UK.
You can confirm this with UK VAT authority.

 

[jfm]

Clash.
Regarding VAT. A UK resident is entitled to export a non paid VAT boat from UK for personal for use in EEC.They do not have to pay VAT in those countries provided it is removed from the EEC for 24 hrs minimum every 18 month.
UK VAT is payable should boat return to UK.
You can confirm this with UK VAT authority.

That's broadly barking up the right tree, but not 100% correct. For example, the UK person isn't the exporter-from-uk in these transactions.

 

[stelican]

That's broadly barking up the right tree, but not 100% correct. For example, the UK person isn't the exporter-from-uk in these transactions.

Please elaborate on the "For example"

 

[jfm]

Please elaborate on the "For example"

I don't want to write an essay on the "18 month" thing, in more detail than people care about, but as a guess about what you were asking, my point was that the UK person doesn't take delivery in UK then export from UK. Typically he/she takes delivery outside the UK and outside the EU, then imports into EU, which means that someone else has done the exporting.

Some of the details differ slightly in practice depending on whether you're buying a new or used boat.

Your basic tree bark-up is correct: a person who does not belong in an EU country (that's not quite the same thing as a "UK resident" by the way) may own and run a private boat in the EU without paying any VAT, subject to various not-difficult conditions and subject to the 18 month check in/out, broadly as you say. It's a very common situation.

 

[MapisM]

out of touch with the ranking of UK boat brands in UHNW eyes

I suppose there isn't such thing as an official/scientific ranking for that, but if I should guess, I don't think any of them stand a chance to enter the top 10.
Am I far off the mark?
Just curious.

 

[jfm]

I suppose there isn't such thing as an official/scientific ranking for that, but if I should guess, I don't think any of them stand a chance to enter the top 10.
Am I far off the mark?
Just curious.

No scientific rankings afaik but to lifelong boaters it's pretty clear, and you're correct imho on the "not-in-top-ten" aspect.

Of course there are exceptions to prove every rule including UHNW folks who buy s/seeker and Princess, but not many, not enough to make those lines profitable for the builders, and far fewer than the management of those companies dumbly expects.

The dumb management thing is striking - I mean striking for the disconnect between what managers of those companies thank, and reality. A good example is Chris G taking Princess into the M class range a decade ago - a decision now reversed of course. How can a middle manager in Plymouth judge what an UHNW thinks of the Princess brand, other than perhaps by management consultants telling him what he/she wants to hear?

This interview with Princess's ex brand manager is breath-taking. I don't doubt that he is genuine and passionately believes what he says, and he is correct (and rather astute) imho in saying that anthropology matters a lot, but ultimately he is so profoundly mistaken about Princess itself that it beggars belief. Princess is a perfectly nice brand/product at 50-60 feet, in a Ford Ghia kind of a way, but the comments "he and his team have transformed the image of the company from a boat brand to a true luxury brand" and "[Princess is arguably] the most unique manufacturing story in the western world" are miles off the mark.
Kiran Haslam of Princess Yachts offers his final musings - SuperyachtNews

 

[47GC]

@jfm ‘Ford Ghia’ please at least Mercedes!
That press article is scary, I don’t doubt he believes everything he says. Absolutely delusional.

 

[kashurst]

Just looked up the financial results for San Lorenzo. Looked pretty good to me.
There is a very interesting set of presentations on the financial results website. It paints a very dfferent picture from the UK manufacturers.
It shows how many uhnwi there are, and where they are etc.

Have a look at Ferreti as well. There is no whinging in their accounts about how it will all be better next year.

If you wanted to spend millions on a new yacht, (or 100s of thousands?) would you buy it from a company that has a strong track record of success and strong financial set up or would you buy one from a company that keeps being passed on to another new owner, and is financially weak?

 

[MapisM]

This interview with Princess's ex brand manager is breath-taking.

Indeed. That would deserve a place in OED, to exemplify what "marketing BS" is all about.
Did I possibly miss the introduction of a new model using two hulls, one painted in Miami Pink and the other in London Blue?

 

[Seastoke]

Whilst I am enjoying the the thread , I can only assume most of you are mods.

 

[Poignard]

Whilst I am enjoying the the thread , I can only assume most of you are mods.

How dare you!

Over the years I've had to put up with some insults on this forum from you and others but this time you've gone to far!

 

[Seastoke]

How dare you!

Over the years I've had to put up with some insults on this forum from you and others but this time you've gone to far!

I don’t insult , I state facts, but I was talking about the educated discussion . So you should not be offended.

 

[Poignard]

I don’t insult , I state facts, but I was talking about the educated discussion . So you should not be offended.

Actually that's pretty clever, for you; did Mummy help you with the long words?

 

[Seastoke]

Actually that's pretty clever, for you; did Mummy help you with the long words?
[/
Any way let’s get back to the topic. The vote shows that the government has influenced the decision by SS.

 

[jfm]

Just looked up the financial results for San Lorenzo. Looked pretty good to me.
There is a very interesting set of presentations on the financial results website. It paints a very dfferent picture from the UK manufacturers.
It shows how many uhnwi there are, and where they are etc.

Have a look at Ferreti as well. There is no whinging in their accounts about how it will all be better next year.

If you wanted to spend millions on a new yacht, (or 100s of thousands?) would you buy it from a company that has a strong track record of success and strong financial set up or would you buy one from a company that keeps being passed on to another new owner, and is financially weak?

Your last point is immense Kashurst. At the top end of Princess/Sunseeker a customer is asked to become an unsecured creditor of a business to the tune of £10m plus and 10x what he/she would rationally do. I was never going to buy a Princess y95 but when musing the idea I was stuck by the then latest balance sheet: they had less than £1m cash. Putting it another way, pretty much every single potential customer of their 24m+ offerings has more cash, more value/net worth, less outcome risk, and more positive annual cash flow, than the entire company/group that they're thinking of buying from.

To contrast with Sanlorenzo: I bought from the (excellent) UK dealer, but Sanlorenzo spa (not a subsidiary, but the top listed parent company) gave me a perfectly worded full guarantee of the dealer's performance. That's a guarantee from a company with €1bn+ market cap, >€100m annual earnings and cash flow, and something like €200m in the bank. Who in their right mind wouldn't take that into account when shopping for a boat?

Weak balance sheet is only one of the 6 (imho) strategic problems facing the big UK builders, but it's an important one (the other 5 can wait for another day )

 

[jfm]

@jfm ‘Ford Ghia’ please at least Mercedes!
That press article is scary, I don’t doubt he believes everything he says. Absolutely delusional.

Fair enough/apologies - yes, Mercedes. Your boat of course is in their sweet spot and as I've said several times on here Princess's V-range of the last 10 years is one of the best looking fleets on the planet.

But yes, you've seen the point - he does indeed believe it all quite passionately, and is therefore entirely delusional. If only he had spent more time (a) reflecting on management's catastrophic (imho) destruction of value during his tenure and (b) learning from why people didn't buy his boats, instead of applauding what he thinks he did.

 

[47GC]

Your last point is immense Kashurst. At the top end of Princess/Sunseeker a customer is asked to become an unsecured creditor of a business to the tune of £10m plus and 10x what he/she would rationally do. I was never going to buy a Princess y95 but when musing the idea I was stuck by the then latest balance sheet: they had less than £1m cash. Putting it another way, pretty much every single potential customer of their 24m+ offerings has more cash, more value/net worth, less outcome risk, and more positive annual cash flow, than the entire company/group that they're thinking of buying from.

To contrast with Sanlorenzo: I bought from the (excellent) UK dealer, but Sanlorenzo spa (not a subsidiary, but the top listed parent company) gave me a perfectly worded full guarantee of the dealer's performance. That's a guarantee from a company with €1bn+ market cap, >€100m annual earnings and cash flow, and something like €200m in the bank. Who in their right mind wouldn't take that into account when shopping for a boat?

Weak balance sheet is only one of the 6 (imho) strategic problems facing the big UK builders, but it's an important one (the other 5 can wait for another day )

It’s crazy to think that they only have £1m in the bank. I’m in the middle of deal on a used V48, a stepping stone to full retirement in circa 1 year, where I’m considering a new V50 or V55. Learning about the balance sheet has me thinking that I won’t be putting down large staged payments!