HMRC U-turn on tax on returning boats

[Poignard]

My boat, which has been in France continuously since 2014, was built in 1967.

Because of her age, VAT has never needed to be paid on her in the UK or in France.

If I should bring her back to the UK after the end of this year, would I be liable for VAT?

 

[st599]

Following discussions with HM Revenue and Customs (HMRC) that were initiated over three years ago, the two organisations (RYA and British Marine) now understand that the Returned Goods Relief (RGR) will only be available for goods returning to the UK provided that RGR conditions are met and that the goods must have been exported from the UK and return within three years of export. This will mean that, after the transition period, all boat owners established in the UK whose boats have not been in the UK in the last three years will pay VAT for a second time if they want to bring their boats back to the UK.

 

[Baggywrinkle]

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 .

I would imagine there might be people who buy in the UK for export to the EU and then try and sneak their non-VAT paid boats back into the UK - or alternatively .... .

Do you remember the schemes where people bought cars abroad and imported them to the UK as used rather than new cars to save money. With modern production yachts, it might be financially viable to have a boat delivered in France VAT free, spend the summer hols aboard and import to the UK as a second hand boat with a massive tax saving on the new price?

Human ingenuity will mean a whole load of tax dodging and money saving schemes will pop up once there is disparity between the UK and EU.

The authorities will be chasing them all up to ensure they get their cut.

 

[Black Sheep]

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?

Let me be clear Yes...

Thank you for being honest.

I emphatically do not recommend that Forum members attempt to evade border controls, and try to smuggle a yacht into the UK, evading VAT and duty that is payable.

The illegal importation of goods or the evasion of customs duties and taxation is called smuggling, and is an offence. You might be lucky, and just face a civil investigation. But if they prosecute you, not only will the goods in question (your boat) be seized by law enforcement officials, but the most serious smuggling cases may see the perpetrators jailed for up to seven years.

Whether you agree with the law is a side issue.

 

[sailaboutvic]

My boat, which has been in France continuously since 2014, was built in 1967.

Because of her age, VAT has never needed to be paid on her in the UK or in France.

If I should bring her back to the UK after the end of this year, would I be liable for VAT?

The answer is no but who know what this government do

I would imagine there might be people who buy in the UK for export to the EU and then try and sneak their non-VAT paid boats back into the UK - or alternatively .... .

Do you remember the schemes where people bought cars abroad and imported them to the UK as used rather than new cars to save money. With modern production yachts, it might be financially viable to have a boat delivered in France VAT free, spend the summer hols aboard and import to the UK as a second hand boat with a massive tax saving on the new price?

Human ingenuity will mean a whole load of tax dodging and money saving schemes will pop up once there is disparity between the UK and EU.

The authorities will be chasing them all up to ensure they get their cut.u

" Human ingenuity will mean a whole load of tax dodging and money saving schemes will pop up once there is disparity between the UK and EU."
I sure there will be when it come to new boats , I can't see HMC wasting large sums of money trying to catch people bring back 10/20/30 year old boats back which they own for some years .
Mind you after saying that , they seen to waste enough money now .

 

[Poignard]

I seem to remember there being a thread on here some years ago when someone posted that he had sailed to France, visited several ports , then returned to the UK and no officials took any interest in his movements and would therefore know nothing about him.

Another poster replied, I think he was an employee of Customs & Excise, detailing when and where his vessel had been.

 

[Black Sheep]

My boat, which has been in France continuously since 2014, was built in 1967.

Because of her age, VAT has never needed to be paid on her in the UK or in France.

If I should bring her back to the UK after the end of this year, would I be liable for VAT?

Almost certainly not, but I am not a VAT lawyer. I suspect the RYA would be a good source of advice.
Just don't try to smuggle her in!

 

[Baggywrinkle]

Following discussions with HM Revenue and Customs (HMRC) that were initiated over three years ago, the two organisations (RYA and British Marine) now understand that the Returned Goods Relief (RGR) will only be available for goods returning to the UK provided that RGR conditions are met and that the goods must have been exported from the UK and return within three years of export. This will mean that, after the transition period, all boat owners established in the UK whose boats have not been in the UK in the last three years will pay VAT for a second time if they want to bring their boats back to the UK.

It's how the Inland Revenue intends to prove when the boat was exported that interests me .... I'd say, sure, where's your record of the export paperwork because I don't have any?

 

[sailaboutvic]

It doesn't matter if he is or isn't as no laws as been broken as yet ,
As there no law yet to break , it all pipe line stuff .
All I say is it a shame he didn't respect my edit , but there you go .

 

[Poignard]

Almost certainly not, but I am not a VAT lawyer. I suspect the RYA would be a good source of advice.
Just don't try to smuggle her in!

.

Smuggle her in? She and her crew are so old and decrepit she'd probably be towed in!

 

[Black Sheep]

It's how the Inland Revenue intends to prove when the boat was exported that interests me .... I'd say, sure, where's your record of the export paperwork because I don't have any?

After Dec 2023 that won't be a problem. If no paperwork it must have been exported pre-Dec 2020, ie over three years ago, so VAT is payable. (or it was exported more recently without clearing out correctly...).

Between now and then, as I said in #21, there is a small amount of scope to claim that you exported the boat within the last three years but there is no paper trail as you weren't required to clear out of UK. You might get away with it. You might not. They might be relaxed about things. They might gather evidence from social media and various administrative records. If they sub-poena'd your bank records, would they find payments for over three years of EU marina fees?

 

[Baggywrinkle]

After Dec 2023 that won't be a problem. If no paperwork it must have been exported pre-Dec 2020, ie over three years ago, so VAT is payable. (or it was exported more recently without clearing out correctly...).

Between now and then, as I said in #21, there is a small amount of scope to claim that you exported the boat within the last three years but there is no paper trail as you weren't required to clear out of UK. You might get away with it. You might not. They might be relaxed about things. They might gather evidence from social media and various administrative records. If they sub-poena'd your bank records, would they find payments for over three years of EU marina fees?

That's why I thought it would be most likely for them to use 31.12.2020 to start the export clock on every UK boat in the EU. The goods have effectively been exported because the UK has shrunk it's customs area from EU wide to the UK only, effectively exporting everything outside the new UK only customs area - therefore anything entering the UK before 31.12.2023 with EU VAT paid should be able to claim RGR but afterwards, the door is closed.

The inland revenue will waste so much resources trying to prove beyond reasonable doubt that a boat has been out of the UK - it really won't be worth their while for the average yacht - super yachts might be a different story, but I doubt many are VAT paid anyway.

It has worked like this, but in reverse, for every country that has joined the EU - the VAT paid goods in the country become EU Union Goods on the day of accession, and the non-VAT paid goods that belong to EU citizens experience a chargeable event as they are deemed to be imported to the EU on the date of accession - because the EU border expands to encompass the new country with all its goods.

The UK is shrinking its customs area on the 31.12.2020 and effectively "exporting" everything outside the new UK customs border to the EU.

 

[newtothis]

Where do I send the money too

Barnard Castle.

 

[Black Sheep]

That's why I thought it would be most likely for them to use 31.12.2020 to start the export clock on every UK boat in the EU. <snip>

The UK is shrinking its customs area on the 31.12.2020 and effectively "exporting" everything outside the new UK customs border to the EU.

I agree, that would be the simplest solution. If they do that, my waffling on about what might happen in the next three years is irrelevant. But my advice to play with a straight bat still stands.

 

[nortada]

I agree, that would be the simplest solution. If they do that, my waffling on about what might happen in the next three years is irrelevant. But my advice to play with a straight bat still stands.

As was said in another place, too much honesty doesn't always improve your case.

They don't play cricket in Portugal.

 

[Norman_E]

Keep it there Norman you much better off then taken it back .

My boat actually had German VAT paid on it. I have no intention of sailing back to the UK, but at 75 I will have to sell it sometime or other, and will get less because its no longer EU VAT paid. I have no doubt that UK civil servants were complicit in putting the VAT rules in place, after all the bastards spent the entire period of our EU membership gold plating EU regulations, usually to our disadvantage as a country..

 

[Baggywrinkle]

My boat actually had German VAT paid on it. I have no intention of sailing back to the UK, but at 75 I will have to sell it sometime or other, and will get less because its no longer EU VAT paid. I have no doubt that UK civil servants were complicit in putting the VAT rules in place, after all the bastards spent the entire period of our EU membership gold plating EU regulations, usually to our disadvantage as a country..

Perhaps, the UKs efforts should have been directed at the gold plating we didn't like, rather than the entirety of our EU membership? ... seems like a case of throwing the baby out with the bathwater.

 

[sailaboutvic]

My boat actually had German VAT paid on it. I have no intention of sailing back to the UK, but at 75 I will have to sell it sometime or other, and will get less because its no longer EU VAT paid. I have no doubt that UK civil servants were complicit in putting the VAT rules in place, after all the bastards spent the entire period of our EU membership gold plating EU regulations, usually to our disadvantage as a country..

I don't think many be interested in sailing their boats back and anyone in the UK thinking of sailing off in the sunset won't be thinking about buying a British non EU VAT boat from anyone in the UK unless it dirty cheap ,
so I think the UK market on boats will only be attractive to others local UK sailors which will effect the price .
We seen people from Holland France and other EU buying boats in the UK that will now all stop if this comes to law .
You say your boat is German VAT paid why is it no longer EU VAT paid ?

 

[Norman_E]

No longer EU VAT paid despite the fact that I have the original VAT invoice, because I could not get to it this year to sail it into the EU, so it has now been outside for more than three years.

 

[[178529]]

So, in the worst case scenario and my boat gets stopped by some baddy VAT chap/chappess, how much would I get charged for VAT.

Would it be 20% of the current value of the boat? 20% of the original new cost of the boat? 20% of the boat if sold new now, or an equivelant new boat?