HMRC U-turn on tax on returning boats

[nortada]

The rules are the same in the UK ... out of the country for more than 3 years and the boat is considered exported permanently - therefore attracting import duty and VAT on its return. Same rules in the UK. The Inland Revenue have the ability to waive this if you can prove the following.



Pay less import duty and VAT when re-importing goods to the UK and EU

Notice 8: sailing your pleasure craft to and from the UK

... I'm afraid the UK also has "downright crooked rules that can force anyone to pay VAT twice on the same goods." ... nothing to do with the EU and everything to do with export/import duty. Give them a ring, they might consider the covid pandemic grounds for extending the 3 years - also shop around the EU countries within reach of your boat to see if any of those will waive the 3 year rule due to covid - you might get lucky.

You will be able however, if you do not have citizenship or residency in an EU country, to use the boat in Europe under 18 month temporary admission rules without paying VAT or import duty again, but would be unable to sell it as VAT paid in the UK or EU.

This is what the UK voted for.

If this is the case, no point in those who have been out of the UK for more than 3 years rushing back, because they are already in the net.

Obviously we focus just on boats, but as the rule must apply to everything being repatriated to the UK, the revenue are going to become rather busy.

Not that it will effect me 'cos the boats coming back but if it was, as I never booked out my departure in 2002, if I were to return, there would be no record of me ever having left. As suggested by the continuous SSR number, registered to my UK address, I had been skulking around UK Waters for the past 18 years so I would be well below the radar.

Another observation, as this is long standing UK policy, has anybody been approached to re-pay VAT when returning to UK Waters?

As this has has nothing to do with Brexit, nothing should change after the 31/12/20.

Storm in a teacup.

 

[Graham376]

Well aware of your way with words and because I am an idle shit, please PM a copy of your letter to your PM so I can amend as appropriate and it send to mine.

Idle sod I'll copy to you and a few others.

 

[Graham376]

What I find worring is if our government decide people who taken residency in other countries are not longer entitled to what they been entitled for years and before people say they can't do that , that can do what they think they can get away with .

Not sure if this will be a problem as UK allows dual residence and has dual tax agreements with several countries.

 

[st599]

My boat, which was VAT paid is in Turkey. Last entered the EU in May 2017, maintaining its VAT paid status, but due to this year's events I could not get to it so it lost its VAT paid status in May this year. Nothing to do with Brexit but everything to do with the EU's downright crooked rules that can force anyone to pay VAT twice on the same goods.

If you look at which countries suggested the amendment to EU rules, which do you see?

 

[Chris_Robb]

C1331? Don't you mean the UK's flash new online reporting tool for yachts and private planes that they promise is somehow integrated in to the Radar tracking?

No the c1331 is the document that all 3rd countries have filled for years. We will now need to do it , but I have no idea if the new on lone system is a goer.

 

[st599]

Not sure if this will be a problem as UK allows dual residence and has dual tax agreements with several countries.

It will depend on the rules. Can an EU citizen import a non-EU flagged vessel in to the EU and similarly for UK citizens and UK-flagged vessels? Just look at what happens with cars at the Swiss border.

 

[Baggywrinkle]

Since we have been in the EU, we have all been in the same customs union. Moving a boat from the UK to an EU country was not an export and I suspect will not be counted as such retrospectively.

The "event" which will trigger the effective export of UK boats to the EU will be the split up of the customs union between the UK and EU - that happens on 31.12.2020 - so my interpretation is that the 3 year export clock for UK owned boats IN THE EU will start then.

Boats in the EU on 31.12.2020 will retain their status as Union Goods, (VAT paid in the EU) .. and will be considered as exported by the UK authorities. (How they will know is another question).

That's how it worked when Croatia acceded to the EU ... any time spent in Croatia or anywhere else before the date of accession was irrelevant - the chargeable event, (the import to the EU) occurred on the date the country joined the EU. The UK leaving will simply be the reverse of this process IMO and the export event will occur as the UK leaves the EU on 31.12.2020.

My assumption is that owners who want to retain their VAT paid status in the UK then have 3 years to bring them back to the UK and claim RGR. (So up until 31.12.2023).

You are likely to get noticed bringing the boat back into the UK if you follow the rules in place for people and yachts entering the UK from the EU - unless you sneak across the channel, in which case bets are off as to what happens to you - do you feel lucky?

Boats that are out of the EU completely already have their 3 year export clock ticking ... from the point they left the EU/UK combined customs area.

 

[Graham376]

It will depend on the rules. Can an EU citizen import a non-EU flagged vessel in to the EU and similarly for UK citizens and UK-flagged vessels? Just look at what happens with cars at the Swiss border.

I think it depends more on residence than citizenship or flag. As a Portuguese resident, I would immediately have to pay VAT/Duty on any non EU boat imported. As a UK resident also, the same would apply in UK.

 

[Baggywrinkle]

I think it depends more on residence than citizenship or flag. As a Portuguese resident, I would immediately have to pay VAT/Duty on any non EU boat imported. As a UK resident also, the same would apply in UK.

I agree, as a Brit with EU residency or dual citizenship (UK + EU country) you will not be able to use a boat VAT free in the EU or the UK.

I am unable to buy a VAT free boat and keep it in the EU using my UK citizenship because my German citizen makes me liable for VAT in the EU.

I could lie and buy a VAT free boat in say Italy, and keep it there only ever using my UK passport on the paperwork etc., but on applying for my German passport I had to declare my UK passport and vice-versa - so a computer somewhere can make the link. I'd then get properly screwed if the relevant authorities ever found out. IMO ... not worth it.

 

[sailaboutvic]

" You are likely to get noticed bringing the boat back into the UK if you follow the rules in place for people and yachts entering the UK from the EU - unless you sneak across the channel, in which case bets are off as to what happens to you - do you feel lucky?"

YES

Why are you likely to get notice , maybe if you have AIS and a big sign saying I returning back ,
Really do you think there going to be some kind of under ground intelligence service , catching the odd boat coming back
even so if you are stop there nothing as far as I know to stop you cruising the UK ,
Many boat go back and fro with there pets dogs and cat on board each year and not reporting them .
How many get stop ?
Boarder Force having even got the intelligence to stop boats load of people let alone the odd boat return back to the UK

I think like a lot of this stuff some make too much of it .

As for stupid remark like having your boat Impounded and fines , don't people have any imagination.

 

[newtothis]

" You are likely to get noticed bringing the boat back into the UK if you follow the rules in place for people and yachts entering the UK from the EU - unless you sneak across the channel, in which case bets are off as to what happens to you - do you feel lucky?"

YES

Why are you likely to get notice , maybe if you have AIS and a big sign saying I returning back ,
Really do you think there going to be some kind of under ground intelligence service , catching the odd boat coming back
even so if you are stop there nothing as far as I know to stop you cruising the UK ,
Many boat go back and fro with there pets dogs and cat on board each year and not reporting them .
How many get stop ?
Boarder Force having even got the intelligence to stop boats load of people let alone the odd boat return back to the UK

I think like a lot of this stuff some make too much of it .

As for stupid remark like having your boat Impounded and fines , don't people have any imagination.

You are Dominic Cummings and I claim my £5.

 

[Black Sheep]

" ...unless you sneak across the channel, in which case bets are off as to what happens to you - do you feel lucky?"

YES

Why are you likely to get notice , maybe if you have AIS and a big sign saying I returning back ,
Really do you think there going to be some kind of under ground intelligence service , catching the odd boat coming back

Let me be clear - Are you recommending to Forum members that they deliberately evade border controls entering the country? That they disobey any law requiring them to clear into the UK? And that they use such methods to evade paying duty and/or VAT that is legally payable?

 

[sailaboutvic]

Let me be clear - Are you recommending to Forum members that they deliberately evade border controls entering the country? That they disobey any law requiring them to clear into the UK? And that they use such methods to evade paying duty and/or VAT that is legally payable?

I had edit this not because I dont stand by what I wrote but more that I don't fancy shore leave .

 

[sailaboutvic]

You are Dominic Cummings and I claim my £5.

Where do I send the money too

 

[sailaboutvic]

Some people what to come over as if they so white they the first to break the law when it suite them .
We already paid VAT for our boats .
Maybe when they bring in a law that say you have to paid VAT every year on your car you be the first in line to pay it .
Some how I don't think so

 

[TernVI]

" You are likely to get noticed bringing the boat back into the UK if you follow the rules in place for people and yachts entering the UK from the EU - unless you sneak across the channel, in which case bets are off as to what happens to you - do you feel lucky?"

YES

Why are you likely to get notice , maybe if you have AIS and a big sign saying I returning back ,
Really do you think there going to be some kind of under ground intelligence service , catching the odd boat coming back
even so if you are stop there nothing as far as I know to stop you cruising the UK ,
Many boat go back and fro with there pets dogs and cat on board each year and not reporting them .
How many get stop ?
Boarder Force having even got the intelligence to stop boats load of people let alone the odd boat return back to the UK

I think like a lot of this stuff some make too much of it .

As for stupid remark like having your boat Impounded and fines , don't people have any imagination.

Yes there is a bunch of people keeping an eye for boats crossing the channel.
At the moment, they are mostly concerned with drugs etc.
But it's like the bloke checking the contents of wheelbarrows at the dockyard gate, eventually they twig it's wheelbarrows being smuggled.

 

[st599]

The "event" which will trigger the effective export of UK boats to the EU will be the split up of the customs union between the UK and EU - that happens on 31.12.2020 - so my interpretation is that the 3 year export clock for UK owned boats IN THE EU will start then.

That was the RYA's understanding until last week. They have since been informed by HMRC that the event is the export from the UK whenever that happened.

 

[goeasy123]

This is not a U-turn as some of us have been endlessly saying. The government made a vague promise but the advice from CA, RYA and HMRC have been clear that unless the law is changed then boats will be either UK VAT paid or EU VAT paid but never both. All the times on this forum that people have blindly banged on about T2Ls and denied the problem. There is no U turn and no surprise but hopefully this will convince a few more people.

Rupert: I agree with you're understanding.

What frustrates me is the banging on about about, T2L's, loopholes and what the authorities in the UK and EU have in place or intend to do.... rather than what are we going to do about it.

We need someone (CA, RYA, British Marine other EU sailing organizations, MPs et al) on our behalf to represent our interests and get the law changed. I.e. that a boat, as a privately own chattel, not used for commercial purposes and not traded should not at any time (3 years or otherwise) be subject to any form of retaxation when returning to the EU or UK from a 3rd country.

That is in effect what HMRC have been doing to date, but now, according the the RYA statement, may implement.

How do we do get properly represented on this matter?

 

[sailaboutvic]

Yes there is a bunch of people keeping an eye for boats crossing the channel.
At the moment, they are mostly concerned with drugs etc.
But it's like the bloke checking the contents of wheelbarrows at the dockyard gate, eventually they twig it's wheelbarrows being smuggled.

There always been people keeping an eye on boats crossing the channel and having a ex partner who sister was a very senior custom officer at Dover , they know who doing what when it comes to drug ,

There not going to be a flood of boat return to the uk I doubt if any one will come back as there be a much better selling price in the EU as no one going to buy. Second hand boat in the UK to take back to the EU and have to pay VAT again .

 

[Baggywrinkle]

That was the RYA's understanding until last week. They have since been informed by HMRC that the event is the export from the UK whenever that happened.

That is nasty .... I also fail to see how it is legal .... the boat was and is in the same customs union until the end of the year, so a retrospective export, where there is no official export declaration is going to be pretty hard for them to enforce or prove any particular date. I can't see how they can use any date other than the dissolution of the customs union.