How to prove VAT status of boat

[LorenzoC]

The key criteria for claiming RGR is the boat and owner's eligibility, that is the same person who took the same boat out of the UK. Many boats would not be able to provide documentary proof of VAT payment, only that it was purchased privately in the last transaction. This issue has not been flagged up in the advice from the CA and RYA on RGR, nor any reports of it being a difficulty.

Then it is better you won't go in Croatia.
If you couldn't prove to have paid VAT, the authority will oblige you to pay it immediately.

 

[Graham376]

Then it is better you won't go in Croatia.
If you couldn't prove to have paid VAT, the authority will oblige you to pay it immediately.

Are they not following the normal rules? Anyone not resident and visiting an EU State is entitled to 18 months TA for the boat.

 

[Tranona]

Then it is better you won't go in Croatia.
If you couldn't prove to have paid VAT, the authority will oblige you to pay it immediately.

Local officials may start with this line, but they are not following EU rules and anyone experiencing this should lodge a complaint with the EU Commission. TA only applies to boats from third countries of which the UK is now one. The Cruising Association have experience of sorting this (and other examples of Croatia not following the rules) out with the Commission.

 

[Tranona]

Good to see another Gib'Sea owner.

I wrote to my MP about the same topic. He passed my question to the VAT people, who were unable to answer my question - they just quoted the regulations. The regulations are as clear as mud!

They cannot give you a definitive answer because as with anything to do with our laws it depends on the facts of the case. That is why they quote the rules so that you can check the facts of your case against the rules.

HMRC are only interested in whether a particular action leads to a "chargeable event", not whether VAT has or has not been paid in the past or even where it was paid. They know that the vast majority of UK boats do not have documentary evidence of any transactions in the past where VAT was paid. That is because there is no legal requirement for a buyer to keep this evidence - the legal requirement is for the seller to document the transaction and account for any VAT.

So, the facts in your case (and many others like you, including me) are that if you take your boat out of UK waters and re-enter, the act of entry gives rise to a potential "chargeable event". This applies to any boat entering the UK. The tests applied are

1 Did the boat originate in the UK
2 Was the boat in the UK on 31/12/2020 or purchased in the UK since then
3 Are you the owner who took the boat out of the UK

If the answer to those 3 basic questions is yes then no VAT is due and the boat can enter. They may well ask for supplementary evidence like a Bill of Sale to show ownership and that either the purchase was private or if a retail purchase who the seller was. Other than that they have no reason to ask anything else and as you can imagine because the vast majority of entries will be of this kind there is likely to be little more than spot checks, or intelligence led checks.

If the answer to any of those 3 questions is no, potentially there is a chargeable event and then a further series of questions related to whether any of the potential reliefs apply, which are all covered in the rules.

Boats entering the EU follow essentially the same rules with the same reliefs, except that their RGR time limit is still notionally 3 years. Individual states are responsible for applying the rules and as we have seen may adopt different processes.