HMRC U-turn on tax on returning boats

[Baggywrinkle]

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?

It's likely to be a bit worse than that .... dependent on value.

If you have been accused of smuggling under the Customs and Excise Management 1979, it means that you are suspected of the illegal importation of goods or the evasion of customs duties and taxation. The penalty for smuggling or any other excise related offence is likely to be severe, as these crimes have been the subject of a long-running crackdown by HMRC.

What constitutes smuggling?
Smuggling is defined as the “improper importation of goods” whether they are “goods chargeable with a duty which has not been paid” or “goods the importation, landing or unloading of which is for the time being prohibited or restricted by or under any enactment.”

Penalty for Smuggling
Any penalty for smuggling depends on the following criteria:

• The overall value and quantity of the items being smuggled
• The size of the smuggling operation
• If the goods smuggled are drugs, their classification and street value
• Any outside influences, i.e. gang relations
• The intention or purpose of the smuggling

Not only will the goods in question be seized by law enforcement officials, but the most serious smuggling cases may see the perpetrators jailed for up to seven years, though if an individual is found to have been smuggling weapons or large quantities of Class A drugs, they may face a life sentence – which is why seeking the services of trusted smuggling offences solicitors is vital at the earliest possible stage of the proceedings.

Smuggling | Criminal Defence Lawyers | DPP Business & Tax

 

[Graham376]

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.

Can you not get a berthing contract before 31/12 to indicate the boat is in country? Doubt if anyone's going to be counting UK flags in marinas.

 

[Baggywrinkle]

For those UK citizens with UK boats in the Med, this may also be of interest ....

Therefore, yachts flying a non-EU flag, as soon as they enter Community waters, must obtain a declaration of arrival, issued by the Maritime Authority of the first national port of call. A declaration of arrival is valid for 12 months and must be renewed before its expiry.

Temporary admission for yachts: no VAT on worksite operations of non-EU yachts
Yachts which are temporary imported into the EU-Community, and thus into the Italian territory, for purposes of construction, maintenance or assembling in the shipyard are exempted from paying importation duties, pursuant to Article 9(1), no. 2 of the Decree of the President of the Italian Republic 633/1972, which considers transports of export, transit of temporary importation goods as non-taxable goods.

These cases are not subject to temporary importation laws, but to inward processing arrangements, allowing to refit non-EU yachts in Italy in a VAT exemption regime.

Temporary Admission For Yachts: Customs Smuggling - International Law - Italy

 

[[178529]]

It's likely to be a bit worse than that .... dependent on value.







Smuggling | Criminal Defence Lawyers | DPP Business & Tax

Ok, so in a situation where i'm not being a baddy myself but that my boat, like '000s of others is a 90's boat with no original invoice still. How do they calculate the VAT if there is a genuine dispute. I can't believe that the '000s of people sailing round in boats where they can't prove the VAT has been paid on their boats would be treated as criminals.

It does seem that HMRC could recoup some of the covid costs through stopping every boat on the water that is post '85 (or whenever the date for having to prove VAT starts) and asking for proof of VAT and I assume in many cases then charging VAT.

 

[Graham376]

Ok, so in a situation where i'm not being a baddy myself but that my boat, like '000s of others is a 90's boat with no original invoice still. How do they calculate the VAT if there is a genuine dispute.

The only case I know of was a Dutch couple in Spain who had been caught overstaying by several years. They were charged VAT/Duty based on the value at the date caught, not the new value. Funnily enough, they weren't asked for any proof of the value they submitted.

Proving a boat's second hand value is a bit difficult, as advertised asking price can be very different to what the negotiated price is. The seller actually receives even less after expenses/commission. What is the value, the amount the seller receives or, what the buyer pays? If the VAT man was to work on insured values, we'd all be paying over the odds.

 

[Baggywrinkle]

Ok, so in a situation where i'm not being a baddy myself but that my boat, like '000s of others is a 90's boat with no original invoice still. How do they calculate the VAT if there is a genuine dispute. I can't believe that the '000s of people sailing round in boats where they can't prove the VAT has been paid on their boats would be treated as criminals.

It does seem that HMRC could recoup some of the covid costs through stopping every boat on the water that is post '85 (or whenever the date for having to prove VAT starts) and asking for proof of VAT and I assume in many cases then charging VAT.

I have no idea what would actually happen ... the problem with anything involving the authorities is once they get involved it can go any number of ways - IMO it is always a good idea to understand the law and the worst that could happen - this is often very different to what actually happens, but best knowing what is at stake IMO.

That was the only point of my post - obviously, the more valuable the boat, the more is at stake.

When my boat was imported the value was determined by a set of photographs and a "black book" price. This was Croatia though and the valuation was just a formality as the VAT rate was zero.

 

[Graham376]

.. the problem with anything involving the authorities is once they get involved it can go any number of ways - IMO it is always a good idea to understand the law and the worst that could happen - this is often very different to what actually happens, but best knowing what is at stake IMO.

The problem outside the UK is that every bloody official often has his/her own interpretation of the law

 

[grumpygit]

On agreeing a tax paid figure and before I bought a Spanish registered yacht which at the time did have a vat content, the seller went to the Spanish customs to agree a settlement and I asked how this was done. He said they used a valuation book on values and calculated the tax from this. Although the tax paid was immaterial to my purchase, I do not remember the figure but the boat was 3 years old and at the time I didn't class as drastic.

 

[Beneteau381]

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?

Ive got Simon Baynes, James Davies and David Jones on it, all NWales MPs. Up to others to get their MPs involved. Graham has done a superb fact letter which all have had. I also sent them the RYA link, also am sending links to these conversations. Ihave also copied Boris in.

 

[Graham376]

What frustrates me is the banging on about about, T2L's,

For some strange reason, Portugal and Croatia are using T2L as proof that the boat is VAT paid and in free movement within the EU, although the form was never intended to be used for that purpose. AFAIK, no other country has required it. UK VAT say that any issued on or before 31/12 will most likely be invalid as from 01/01/2021.

However, for boats already based in Portugal and Croatia, T2Ls already issued should still prove (in the minds of authorities) EU VAT paid status so, they're worth keeping. I see no use for them elsewhere.

 

[nortada]

For some strange reason, Portugal and Croatia are using T2L as proof that the boat is VAT paid and in free movement within the EU, although the form was never intended to be used for that purpose. AFAIK, no other country has required it. UK VAT say that any issued on or before 31/12 will most likely be invalid as from 01/01/2021.

However, for boats already based in Portugal and Croatia, T2Ls already issued should still prove (in the minds of authorities) EU VAT paid status so, they're worth keeping. I see no use for them elsewhere.

I suspect the T2L issue died a couple of years back. Possibly with a change of personalities in Portuguese Customs.

Although having had one for a number of years, we have never been asked to produce it so it would be interesting/useful to know if anybody has recently been required to show their T2L

That said, if you have one it would make sense to retain it because it can do no harm and nobody has any idea what will happen after 31/12/21. In Portugal, I suspect very little.

Even at this eleventh hour I understand it is still possible to get a T2L from HMRC Salford.

 

[sailaboutvic]

lets wait and see what the out come is and let stop google stuff to frighten others that mean less .

As for Italy the only boat I know that had any problem with a non vat boat , didn't lose his boat or got arrested and for sure He wasn't put behind bars for smuggling his boat in , but when it came to light i.e. He got caught ,an agreed arrangements was made between him and the Italian GF how much he had to pay .
If people want to do anything useful as suggested write to your own MP .

 

[sailaboutvic]

The problem outside the UK is that every bloody official often has his/her own interpretation of the law

I thin k you find the same applies in the UK , one official will do one thing and another some thing different , that's the problem with laws then not straight forward .

 

[sailaboutvic]

No suggestion of smuggling boats back intô the uk for the sake of the internet police man .
But if it become law that a boat return back to the UK is libel for VAT a second time ,
Going back what the non paid vat rules are now ,
what stop you taken a boat back to the UK and leaving within 18 month return back to the EU where it is vat paid for a few days then return back for another 18 month or is that going to change too ,
Are non vat boats not going to be able to cruise the UK?
Are they really going to stop the Dutch French German boats from cruising the UK.
All legal ways around this and no smuggling involved .
But has I posted it all meanless at the moment .

 

[[2574]]

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

Graham,

I’m an idle sod too - yes please........

 

[TernVI]

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?

No.
You won't be allowed to import it, it won't have the RCD documentation.

 

[sailaboutvic]

No.
You won't be allowed to import it, it won't have the RCD documentation.

Who to say after this fiasco is all done with , who to say anything will change ?
who to say any of us will still be alive once the C virus get an hold .

 

[newtothis]

Who to say after this fiasco is all done with , who to say anything will change ? Who to say everyone will have to pay a second lot of Vat , who to say any of us will still be alive .

The government, the government and the government. Given the quality of the members of the current one, I'm not sure I'd be so relaxed about it.

 

[Graham376]

No.
You won't be allowed to import it, it won't have the RCD documentation.

Has anyone actually been asked to prove RCD compliance? Unlike most EU countries, UK couldn't care less where you sail a boat whether suitable or not.

 

[sailaboutvic]

The government, the government and the government. Given the quality of the members of the current one, I'm not sure I'd be so relaxed about it.

Not so sure about the life bit , mind you they seen keen to kill a lot of business off