HMRC U-turn on tax on returning boats

[GTom]

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.

Your German passport is not the issue. Your German tax residence is. Once you check out from the EU customs territory, you'll be free to buy a tax unpaid boat and use it for 18 months. With German passport too.

 

[nortada]

Wouldn't bet on that one, the EU also has a 3 years rule.

See you have just joined this discussion. Do you keep your boat in the EU? If so where?

My boat has been in the EU since 2002 and has yet to attract a second round of VAT so is there a change of EU
policy to regularly re-charge VAT on boats in the EU? If so, have any boats been charged and have I just been lucky? I just beeI think not!

ps Brexit or my status isn’t part of this debate.

 

[grumpygit]

Guys, why are you so worried. In pretty well all cases nothing will change. If you come back after Jan 2024, all you will do is fill in the ToR form which you can do in one minute. This form has been used for years for yachts coming back on ships.

For god sake stop worrying a out nothing. The RYA is incapable of seeing a bus coming straight for them.......

Yes there are some issues and that just requires a statement to clarify. Please don't waste your MPs time, crying Wolf.

I agree, although I can't think of a reason to return my boat back to the UK, it is UK/EU VAT paid and I am going to stay with the assumption that you should not have to pay the VAT twice.

The RYA couldn't organise a p*ss up in a brewery!

 

[Baggywrinkle]

Your German passport is not the issue. Your German tax residence is. Once you check out from the EU customs territory, you'll be free to buy a tax unpaid boat and use it for 18 months. With German passport too.

Is there anyone here on the forums with UK Passport who sails their own boat in the UK VAT free? ... or even the other way round .... any EU citizen sailing a VAT free boat, registered in their name in the EU?
(not owned by a company in Delaware or equivalent).

I didn't think it was possible

 

[Chris_Robb]

Wouldn't bet on that one, the EU also has a 3 years rule.

And because you are not a resident you cannot appl

Is there anyone here on the forums with UK Passport who sails their own boat in the UK VAT free? ... or even the other way round .... any EU citizen sailing a VAT free boat, registered in their name in the EU?
(not owned by a company in Delaware or equivalent).

I didn't think it was possible

It possible but against the law in both the UK after separation and the EU. I would not advise it as in Greece your boat would be impounded and you might end up in jail.
It is residency that matters not the passport.

 

[Graham376]

Your German passport is not the issue. Your German tax residence is. Once you check out from the EU customs territory, you'll be free to buy a tax unpaid boat and use it for 18 months. With German passport too.

It's residence which matters, not tax residence. AFAIK, if anyone is resident in an EU State, they may not have a VAT unpaid boat anywhere in the EU within the Customs Union.

 

[Chris_Robb]

I agree, although I can't think of a reason to return my boat back to the UK, it is UK/EU VAT paid and I am going to stay with the assumption that you should not have to pay the VAT twice.

The RYA couldn't organise a p*ss up in a brewery!

I agree - I will probably sell out in Greece. You will not have to pay vat twice in the event that you return to UK - ToR relief.

 

[Chris_Robb]

See you have just joined this discussion. Do you keep your boat in the EU? If so where?

My boat has been in the EU since 2002 and has yet to attract a second round of VAT so is there a change of EU
policy to regularly re-charge VAT on boats in the EU? If so, have any boats been charged and have I just been lucky? I just beeI think not!

ps Brexit or my status isn’t part of this debate.

Blimey Nortada - what on earth do you mean - second round of VAT! You been at the source

 

[nortada]

Blimey Nortada - what on earth do you mean - second round of VAT! You been at the source

Try reading my post. I have edited to make it clearer.

The suggestion is that those of us who keep our boats in the EU may incur a further VAT liability.

Rather than endorse a further VAT liability, I ask has anybody had this happen? - 18 years in, we haven't.

 

[Chris_Robb]

Try reading my post. I have edited to make it clearer.

The suggestion is that those of us who keep our boats in the EU may incur a further VAT liability.

Rather than endorse a further VAT liability, I ask has anybody had this happen? - 18 years in, we haven't.

You will not incur another round of VAT provided you dont export the yachts for more than 3 years. And then there is provision under RGR - I dont know if they have ToR - to get dispensation on re import. As a Portuguese resident (which I believe you are ) you will be able to claim that. I suspect people like me who now go to Turkey for more than 3 years, would loose the VAT as I am not a resident in any EU country. However I will still be able to use TA.

 

[Graham376]

You will not incur another round of VAT provided you dont export the yachts for more than 3 years. And then there is provision under RGR - I dont know if they have ToR - to get dispensation on re import. As a Portuguese resident (which I believe you are ) you will be able to claim that. I suspect people like me who now go to Turkey for more than 3 years, would loose the VAT as I am not a resident in any EU country. However I will still be able to use TA.

There are so many permutations, it's impossible to cover everyone's situation. Some are UK residents with holiday boats in EU, a few are nomads with no longer formal residence anywhere, sailingoutside EU or UK, some have moved residence to EU and others, like us, have dual residence with boats in EU.

We'll just have to wait and see what happens, it's only money after all

 

[sailaboutvic]

@chris you keep saying three years , three years from where , the date you left the UK when every that may by , three years from when we left the EU ( 2020) and what if you did take the boat , Ie your brought it in the EU , when do the three years start then ?

 

[nortada]

You will not incur another round of VAT provided you don't export the yachts for more than 3 years. And then there is provision under RGR - I dont know if they have ToR - to get dispensation on re import. As a Portuguese resident (which I believe you are ) you will be able to claim that. I suspect people like me who now go to Turkey for more than 3 years, would loose the VAT as I am not a resident in any EU country. However I will still be able to use TA.

Correct. I never suggested I would incur another round of VAT.

There are so many permutations, it's impossible to cover everyone's situation. Some are UK residents with holiday boats in EU, a few are nomads with no longer formal residence anywhere, sailingoutside EU or UK, some have moved residence to EU and others, like us, have dual residence with boats in EU.

We'll just have to wait and see what happens, it's only money after all

On 31st Dec 20, one boat in the UK, the other in the EU, duel residency - plenty of wriggle room.

 

[Mei Mac]

This is a great opportunity for the government to pay a small company, established last week by a Tory donor, a huge amount of money (let's say around £100 million) to set up a 'Catch 'Em On The Way Back' agency. Sounds on par with recent contracts don't you think?

 

[Baggywrinkle]

Residency in a non-EU country can get you a VAT refund, or allow VAT free purchases - even as an EU citizen, but you have to export the goods.

Example: Paul is a Belgian citizen but lives permanently in Canada. Once a year, he returns to Belgium to visit his parents. Paul is a ‘visitor’ and can apply for a refund on a basis of his Canadian residence card.

Can’t I just pay the VAT-free price in the shop?
No. You must pay the full, VAT-inclusive price for the goods in the shop; you will get the VAT refunded once you have complied with the formalities and can show proof of export.

Guide to VAT refund for visitors to the EU - Taxation and Customs Union - European Commission

When I bought my boat in Croatia VAT free, I had to export it the day I took delivery. The only other way to have done it would have been to pay the VAT and apply for a refund on export, which would have incurred further fees - so I did it all on the same day.

My assumption therefore is that you can't buy a boat VAT free in the EU unless you export it and are resident outside the EU.

To then use it in the EU, you need to get temporary admission - rules for temporary admission are ....

1) the yacht is flagged outside the EU customs area;
2) the flag registration is in the name of an individual residing, or corporate entity established, outside the European Union;
3) the yacht is used by persons residing outside the EU customs area.

Yacht outside the EU, this is how temporary admission works

I don't qualify for TA in the EU because I fail on 2 & 3
I don't qualify for TA to the UK because the boat fails on 1

☹

It looks like what GTom said is true, I could buy a VAT free boat in the UK providing I export it - I could then bring it back into the UK under TA if it was registered in Germany and I remained resident in Germany - even with a UK passport.

However, my usage is restricted because of my UK passport and UK rules on residency ....

You’re automatically resident in the UK if either:

• you spent 183 or more days in the UK in the tax year
• your only home was in the UK - you must have owned, rented or lived in it for at least 91 days in total - and you spent at least 30 days there in the tax year.

Tax on foreign income

I don't know how a boat would be classed - is it a "home" in the UK? ... if not, then I still can't stay more than 183 days in the UK in any tax year - even if my boat can stay 18 months. If I did, I'm pretty sure my residence status would change, and my TA would become invalid - causing a chargeable event and VAT would become due IMO.

As a dual citizen doing the same in reverse (resident UK, boat under TA in EU) I would expect similar issues.

 

[Irish Rover]

Is there anyone here on the forums with UK Passport who sails their own boat in the UK VAT free? ... or even the other way round .... any EU citizen sailing a VAT free boat, registered in their name in the EU?
(not owned by a company in Delaware or equivalent).

I didn't think it was possible

I'm an EU citizen. I'm resident in Turkey but I don't have dual nationality. I bought a VAT NOT PAID boat in Greece 3 years ago from a private owner who was also a non EU resident. Since then I've regularly sailed in Greece applying each time for an 18 month transit log. Never had a problem but the Greek customs do look for clear proof of your residence status.

 

[Baggywrinkle]

I'm an EU citizen. I'm resident in Turkey but I don't have dual nationality. I bought a VAT NOT PAID boat in Greece 3 years ago from a private owner who was also a non EU resident. Since then I've regularly sailed in Greece applying each time for an 18 month transit log. Never had a problem but the Greek customs do look for clear proof of your residence status.

Thanks for that .... I guess you have to spend 183 days or more in Turkey to retain your residency? .... which means you can't spend more than 182 days in Greece in any one tax year?

 

[Irish Rover]

Thanks for that .... I guess you have to spend 183 days or more in Turkey to retain your residency? .... which means you can't spend more than 182 days in Greece in any one tax year?

Actually I don't need to spend 183 days in Turkey as I have permanent residency [no longer being granted as far as I know] but that's not really relevant here. I imagine if I spent more than 182 days in Greece I'd be classed as resident in Greece and therefore liable to pay the VAT.

 

[andrewAB]

I am UK citizen & resident with VAT paid boat on Greece (under SSR). Sounds like I will loose VAT status if I sail to Turkey for a week. Any ideas on how to retain VAT status (as it will have value to future EU resident buyer)?

Thanks
Andrew

 

[MickeyP]

For those that are interested the RYA is running a Webinar for members covering some of the subjects discussed in this thread:

Keeping you up to date on the latest developments.
Join us at 4pm on Wednesday 14 October for a free webinar to find out the latest news on the RYA’s Brexit lobbying activities directly from members of the RYA’s Cruising, Legal and Government Affairs Team.
Howard Pridding, RYA Director of External Affairs and Stuart Carruthers, RYA Cruising Manager, will be hosting the online event and will be sharing key updates and information with the audience.
The event will be covering the latest communications with Government on the Brexit related subjects that RYA members are most concerned about, including: cruising access to the Schengen Area, the Return Goods Relief for boats, the validity of sailing qualifications in the European Union (EU) and changes to border controls.
Presenter at the webinar, Howard Pridding said: “The aim of this webinar is to keep our members informed with the latest communications between ourselves and Government. Since 2016 we have been urging the Government to review and take action on Brexit subjects affecting recreational boaters. Keeping RYA members regularly updated and included on the latest developments continues to be a priority and we hope that members will be able to attend
‘RYA Brexit Update Webinar’ takes place at 4pm on Wednesday 14 October.