Dual VAT status?

[Tinto]

Hi
I am looking at buying a U.K. flagged boat which was originally purchased new in the U.K. but was in the EU on 31/12/20 . Can this boat be sailed in EU and U.K. waters without time limit or further payment of VAT? Being a U.K. citizen I know I am subject to the 90/180 rule but that’s me as a person and not related to the boat.
Thank you for your advice.

 

[madabouttheboat]

My take on it is that at this time it is EU VAT paid. You have until June 2022 (I think) to return it to the UK and claim RGR to reinstate its UK Vat paid status. Officially I don't believe it can retain both, but if you had paperwork to show it was in the EU on the 31/12/20 AND paperwork to show it was subject to RGR before June 22 then you might have a kind of 'unofficial' dual VAT paid status, but you may be n shaky ground if anyone takes a close interest. All IMHO.

EDIT: Sorry, just realised you don't actually own the boat yet. That will change things. Where is the boat now, and where will it be when you buy it?

Only the original exporter can claim RGR, so if you buy it in the EU, its UK VAT paid status is lost forever, or until it is imported again and VAT paid. If you buy it in the UK, after the original exporter has claimed RGR, it will be UK VAT paid but you will have difficulty claiming EU VAT paid status as any proof of its location on the required date will not be in your name.

 

[dunedin]

I am not an expert (others who are may be along soon), but as far as I am aware the answer is sadly no.
If the boat has all the right paperwork, and you buy it in EU waters, it should retain EU VAT (Union Goods) status. However if a UK resident (not precisely the same as citizen) you would need to pay UK VAT if brought into UK waters, even for a day - as you were not the owner who exported the boat.
You don’t say where the boat is now, but if it is still owned by the same owner who took the boat out of the UK, it is possible that owner could move the boat to the UK before June next year and you buy in UK waters. That should retain UK VAT status, and then a UK resident could use 18 month temporary importation to the EU.
But no magic solutions when buying a boat.
PS. You asked about VAT, but check out RCD / RCR implications also if crossing EU / Uk boundaries

 

[sailaboutvic]

Both answer above are correct , as you wasn't the owner who exported the boat you can not claim RGR sorry .
Not fair I know .

 

[Tinto]

The boat is in the EU. Seller and Buyer and U.K. residents

 

[Graham376]

It depends where the boat is now. If the boat is in the EU and the sale is completed there, it keeps EU VAT status but, as said above, if you bring it to UK then VAT is payable. OTOH, the current owner (or a delivery crew) can bring it back before sale and owner can claim RGR, if he was the one who took it from UK to EU.

If the boat is in UK and you purchase it here it keeps it's UK VAT status and you can have TA for 18 months when visiting EU as a non-resident.

Everything depends on where the boat is (or appears to be) located when the sale takes place. Where do you want to keep it, UK or EU?

EDIT - Our posts crossed so the main point is - where do want to base and use it?

 

[sailaboutvic]

Rereading the OP , you not said where the boat is on day of sale but it does sound it's in the EU , so you would keep EU vat status

 

[Tinto]

I live on the Firth of Clyde and would be bringing it back there but ultimately would like to be living aboard in the Mediterranean in 4 or 5 years time. I am curious about what happens to the boats VAT status if I kept it in Northern Ireland which I think is still in the Customs Union

 

[Tinto]

I am not an expert (others who are may be along soon), but as far as I am aware the answer is sadly no.
If the boat has all the right paperwork, and you buy it in EU waters, it should retain EU VAT (Union Goods) status. However if a UK resident (not precisely the same as citizen) you would need to pay UK VAT if brought into UK waters, even for a day - as you were not the owner who exported the boat.
You don’t say where the boat is now, but if it is still owned by the same owner who took the boat out of the UK, it is possible that owner could move the boat to the UK before June next year and you buy in UK waters. That should retain UK VAT status, and then a UK resident could use 18 month temporary importation to the EU.
But no magic solutions when buying a boat.
PS. You asked about VAT, but check out RCD / RCR implications also if crossing EU / Uk boundaries

not sure what you mean about RCD / RCR?

 

[Graham376]

Presumably, you're familiar with CE marking & RCD (Recreational Craft Directive)? The UK now has its own version of the RCD called Recreational Craft Regulations

 

[st599]

not sure what you mean about RCD / RCR?

The UK copied the EU's CE requirements for boats for the new UKCA RCR requirements. The UK have decided however that from 1/1/23, previous CE status will not confer new UKCA status. Therefore to buy it in the UK it will need re-testing.

https://www.rya.org.uk/news/rya-and...tial-new-costs-of-trading-second-hand-vessels

 

[westernman]

The UK copied the EU's CE requirements for boats for the new UKCA RCR requirements. The UK have decided however that from 1/1/23, previous CE status will not confer new UKCA status. Therefore to buy it in the UK it will need re-testing.

https://www.rya.org.uk/news/rya-and...tial-new-costs-of-trading-second-hand-vessels

It will need re-certification to the current copy and paste of the RCD II requirements.
Which if your boat was built before 2008 this may well be difficult as it was built to the earlier version of RCD (and possibly impossible because the engine does not meet the newer emissions requirements).

 

[dunedin]

I live on the Firth of Clyde and would be bringing it back there but ultimately would like to be living aboard in the Mediterranean in 4 or 5 years time. I am curious about what happens to the boats VAT status if I kept it in Northern Ireland which I think is still in the Customs Union

That sounds like it could be problematic VAT (and potentially RCD / RCR wise) If UK resident buys a boat in the EU to immediately bring back to the UK, then later back to the EU.
Generally, unless an expert in these matters, most seem suggest that for a UK resident, post-B, if want to keep a boat in the UK best to now buy in the UK for simplicity, or if want to keep permanently in the EU buy in the EU, but dont expect to bring to UK.
Other general point is, if asking questions on a forum then you are probably not an expert in these arcane matters (not a criticism, few are), and if not an expert could get wallet burnt.

 

[dgadee]

I live on the Firth of Clyde and would be bringing it back there but ultimately would like to be living aboard in the Mediterranean in 4 or 5 years time. I am curious about what happens to the boats VAT status if I kept it in Northern Ireland which I think is still in the Customs Union

My view is that you could certainly keep it in NI without problem. I moved from NI to Scotland over the summer and looked into these matters, having one boat in NI and one in Greece at end of 2020. My NI boat is now in Scotland. My view also would be - not everyone would agree, perhaps - is that if it is kept in NI for a season it could then be moved to GB without problem. NI is in the very unusual (unique?) circumstances of being in two separate 'countries' at the same time in terms of VAT.

 

[Tinto]

Presumably, you're familiar with CE marking & RCD (Recreational Craft Directive)? The UK now has its own version of the RCD called Recreational Craft Regulations

I am familiar with CE marking as I was Technical Manager for ETAP lighting from 2000 to 2007 during which time the bulk of harmonisation of
Technical standards took place. The yachting factory was just down the road. Can’t claim to be an expert on every TLA in existence though. Either way, if the U.K. is heading down a path of no longer recognising European or other norms it is heading for big trouble. That is just crazy stupid, but maybe I should not be surprised?

l am looking at two ETAP boats built in 1991 and 2000, so both before 2008

 

[Tinto]

The UK copied the EU's CE requirements for boats for the new UKCA RCR requirements. The UK have decided however that from 1/1/23, previous CE status will not confer new UKCA status. Therefore to buy it in the UK it will need re-testing.

https://www.rya.org.uk/news/rya-and...tial-new-costs-of-trading-second-hand-vessels

This is an excerpt from the legislation and is valid as of November 2021.


Products placed on the market before 1 January 2021
If you placed an individual fully manufactured product on the EEA or the UK market (either in Northern Ireland or Great Britain) before 1 January 2021, you do not need to do anything new. These individual goods can continue to circulate on either market until they reach their end user and do not need to comply with the changes that took effect from 1 January 2021.
A fully manufactured good is ‘placed on the market’ when there is a written or verbal agreement (or offer of an agreement) to transfer ownership or possession or other rights in the product. This does not require physical transfer of the good.
You can usually provide proof of placing on the market on the basis of any relevant document ordinarily used in business transactions, including:
• contracts of sale concerning goods which have already been manufactured and meet the legal requirements;
• invoices; and
• documents concerning the shipping of goods for distribution.
The relevant economic operator (whether manufacturer, importer or distributor) bears the burden of proof for demonstrating that the good was placed on the EEA or UK market before 1 January 2021.
Existing CE marked stock
The UK will allow CE marked products that have been either self-declared as compliant (where permissible) or where compliance must and has been demonstrated through assessment by an EU-recognised conformity assessment body (notified body) to be placed on the GB market until 31 December 2022.
10

Recreational Craft Regulations 2017: Guidance (GB)
Products lawfully placed on the market with a CE marking by 31 December 2022 can continue to circulate on the GB market after this date.”

Full document here

https://assets.publishing.service.g...eational-craft-regulations-2017-version-2.pdf

CE marking was always considered a bit Mickey Mouse in my industry due to self certification and considered to be nowhere near as demanding as ENEC, KEMA, BSI etc. i have seen stuff in shops which was CE marked which should not have had one at all.

 

[Graham376]

Most of the document is aimed at manufacturers and dealers, perhaps the more relevant wording to us is in Section 8.

If a private importer imports a product that has not previously been placed on the GB market, where the manufacturer has not carried out the relevant conformity assessment procedure, the private importer will have to carry out a post construction assessment to demonstrate conformity with the Regulations, as set out in Schedule 5

This would appear to allow a second hand boat which had previously been in use in the UK to be re-imported without assessment but an EU boat which hadn't been used in UK previously must undergo assessment.

 

[Tinto]

Most of the document is aimed at manufacturers and dealers, perhaps the more relevant wording to us is in Section 8.

If a private importer imports a product that has not previously been placed on the GB market, where the manufacturer has not carried out the relevant conformity assessment procedure, the private importer will have to carry out a post construction assessment to demonstrate conformity with the Regulations, as set out in Schedule 5

This would appear to allow a second hand boat which had previously been in use in the UK to be re-imported without assessment but an EU boat which hadn't been used in UK previously must undergo assessment.

My interpretation of that would be that the product would have to be something which was never sold in the U.K. before. Given that Beneteau sold many 411’s in the U.K. then bringing in another one is neither here nor there. It would be like saying you have to have a Fiat 500 assessed and certified upon importation when there are thousands of them driving about. Given I am not looking at a bespoke one off boat then I don’t see that paragraph being applicable.

it would also be at odds with the point of view of the British government when it comes to the Irish border issue where the government is asking the EU for mutual recognition of standards on the basis of high quality on both sides even though the standards may not be fully aligned.

 

[Graham376]

My interpretation of that would be that the product would have to be something which was never sold in the U.K. before. Given that Beneteau sold many 411’s in the U.K. then bringing in another one is neither here nor there. It would be like saying you have to have a Fiat 500 assessed and certified when there are thousands of them driving about. Given I am not looking at a bespoke one off boat then I don’t see that paragraph being applicable.

I could be wrong but I think it would be a more reasonable interpretation.

Using your example of a Beneteau, my interpretation is - any which were/are in the UK didn't need testing to RCR standards as we accepted CE marking and RCD. Any Beneteau imported for the first time into the UK in future, will need to be RCR compliant as we won't recognise it's CE mark.

 

[Tinto]

Using your example of a Beneteau, my interpretation is - any which were/are in the UK didn't need testing to RCR standards as we accepted CE marking and RCD. Any Beneteau imported for the first time into the UK in future, will need to be RCR compliant as we won't recognise it's CE mark.

If you mean any beneteau model not sold in the U.K. before then I would agree. But it can’t be any specific individual Beneteau boat. as much as boats are personal to owners

product = “beneteau 411” not “lucky Lucy”

extending your interpretation would mean that everything from watches to TVs would have to be tested. There is simply not the capacity for that to be done and it misses the point of the objective of this type of legislation.