In assigned place on day of Brexit

[BurnitBlue]

I recall when UK ´joined the EU, the boat had to be in a marina EU or UK for proof via the Marina Bill that the boat was in the EU on that date and could then claim VAT paid in the EU.

Would the same condition of position be enforced on the boat regardless of where the owner is if the boat is not in the UK on Brexit day. For instance, I reckon the boat will be have to pay UK Vat if she returns to UK after that day.

What thinks you?

 

[RichardS]

My boat spends its time relaxing in the Med sunshine whilst hoping that the sea doesn't freeze over.

The chances of it ever returning to the UK are about the same.

Richard

 

[maby]

I recall when UK ´joined the EU, the boat had to be in a marina EU or UK for proof via the Marina Bill that the boat was in the EU on that date and could then claim VAT paid in the EU.

Would the same condition of position be enforced on the boat regardless of where the owner is if the boat is not in the UK on Brexit day. For instance, I reckon the boat will be have to pay UK Vat if she returns to UK after that day.

What thinks you?

I suspect that HMRC are going to have a lot more to think about following Brexit than claiming back VAT on a few thousand boats that are moored abroad.

 

[macd]

I recall when UK ´joined the EU, the boat had to be in a marina EU or UK for proof via the Marina Bill that the boat was in the EU on that date and could then claim VAT paid in the EU.

The UK joined the EU in 1973. The qualifying 'deemed VAT paid' date you're thinking of is 31.12.92. For countries that joined later than that, there was an even later date. These were known as 'transitional arrangements'. It is possible that such a mechanism may be instituted for Brexit. In fact Tranona, who's very well informed on matters VAT, has suggested it as a possibility. But there are other possibilities, too...

I'd consider it most unlikely that HMRC would be levying VAT on boats bought by UK residents in the EU27 pre-Brexit. But most things are possible.

Incidentally, although it sometimes seems assumed on here that leisure craft are unique in this regard, in many matters they fall under the raft of regulations for 'means of transport', which is rather less of a niche.

 

[Tranona]

I recall when UK ´joined the EU, the boat had to be in a marina EU or UK for proof via the Marina Bill that the boat was in the EU on that date and could then claim VAT paid in the EU.

Would the same condition of position be enforced on the boat regardless of where the owner is if the boat is not in the UK on Brexit day. For instance, I reckon the boat will be have to pay UK Vat if she returns to UK after that day.

What thinks you?

As macd says there were transition arrangements in 1992 to deal with the standardisation of VAT procedures which included means of treating previously VAT paid boats in some states - remember, not all states had VAT prior to that. At the same time the rules specific to movement of means of transport were established which essentially said that once VAT was paid in one state (either before or after 1992) a boat could move freely and not be subject to VAT again provided it stayed in the EU. Has generally worked well, despite the problems of lack of evidence of payment, potential loopholes and some states operating and charging VAT (or not) in ways different from that intended. The same basic transition rules were applied to states joining after 1992, the most important from a boat owners point of view perhaps being Croatia.

So, it seems likely because "Transition" is a powerful word in EU-speak (despite Mrs M wanting to replace it with "implementation") that there will be a set of transition rules to deal with movement of boats where VAT was paid in "old EU" so that they are not subject to any further VAT. Difficult to predict what these will be until there is an agreement, nor to predict the implementation date. Latest proposed negotiating rules (from the EU) seem to be moving the effective leave date to 2021 rather than the politically important 2019 that Mrs M talks about. So expect from the UK point of view we will have left in March 2019 but nothing substantive will change until 2021. However, there are already cracks in this as it has been agreed that EU citizens moving to UK after 2019 will not have the same rights as those already here before that date!

None of this of course affects boats bought in the UK after 2019 (or 2021) with regard to movement in the new EU, nor about boats in the EU that want to visit or be sold to UK, or return to UK. This may, of course also be dependent on whether the owner or buyer is a new EU citizen/resident or a UK citizen/resident, or from another third country.

Expect a long list of rules!

 

[BurnitBlue]

Thank you for the very comprehensive explanation. I guess I can proceed with my plans to sail to the Caribbean in 2018 (I hope, unless something else gets in the way again). I suppose I can always duck into Martinique should it be necessary. I think that island is part of France. If all is well my bucket list to die of sex under a palm tree in Tahiti will be next stop.

 

[macd]

I fear it may not be quite so simple as that, Burnitblue.

If there is a transitional arrangement qualifying date, it's far from a given that it will be on Brexit day (March 2019-ish); it may be at the end of a transitional period, currently being talked of as about two years, so March 2021. Or some other date altogether.

Secondly, although Martinique (and St. Martin, Guadaloupe and others) are parts of France and the EU, they are not part of the EU customs area. EU VAT is not applicable there, so I doubt they'd offer a transitional umbrella. I think the same goes for French possessions in the Pacific, which might otherwise come in handy for where you might be in 2021.

But with plans such as yours...just go for it and enjoy. Whatever happens with Brexit, one chance is probably all you'll get.

 

[BurnitBlue]

I fear it may not be quite so simple as that, Burnitblue.

If there is a transitional arrangement qualifying date, it's far from a given that it will be on Brexit day (March 2019-ish); it may be at the end of a transitional period, currently being talked of as about two years, so March 2021. Or some other date altogether.

Secondly, although Martinique (and St. Martin, Guadaloupe and others) are parts of France and the EU, they are not part of the EU customs area. EU VAT is not applicable there, so I doubt they'd offer a transitional umbrella. I think the same goes for French possessions in the Pacific, which might otherwise come in handy for where you might be in 2021.

But with plans such as yours...just go for it and enjoy. Whatever happens with Brexit, one chance is probably all you'll get.

You are quite right Mac, I should just go ahead and enjoy the voyage. I will not be the only one out there with a VAT threat. In fact I have just remembered that if a yacht is out of the EU for two years it is due for VAT on return with or without Brexit. Will anyone be daft enough to tell the revenue when they get back. Maybe a few fibs on the blog may be worth it.

Thanks again.

 

[Fiddlesticks]

I wouldn't worry, they'll never let it happen.

 

[macd]

You are quite right Mac, I should just go ahead and enjoy the voyage. ....
I have just remembered that if a yacht is out of the EU for two years it is due for VAT on return with or without Brexit.

Thanks again.

The figure is actually three years, after which the vessel is considered 'exported', but it's far from absolute. There's a whole flock of potential exclusions, most notably if the boat is 're-imported' as a chattel by the same owner who exported it. Another thought: if it's on SSR, contrive to get a new certificate just before you leave. You might have difficulty renewing from under that palm tree (particularly if you've finished your bucket list...)

 

[sailaboutvic]

Thank you for the very comprehensive explanation. I guess I can proceed with my plans to sail to the Caribbean in 2018 (I hope, unless something else gets in the way again). I suppose I can always duck into Martinique should it be necessary. I think that island is part of France. If all is well my bucket list to die of sex under a palm tree in Tahiti will be next stop.

One word of warning ....
I hear the sand is quite course so I take a sheet to lie on if I was you .

 

[capnsensible]

One word of warning ....
I hear the sand is quite course so I take a sheet to lie on if I was you .

Also take an umbrella. It honks with rain a lot.

 

[GrahamM376]

I doubt there will be any problems with VAT status on existing EU boats as long as they remain in same ownership but, suspect VAT may be payable if they change ownership and then either move to UK from EU or from UK to EU, much the same as VAT paid boats purchased in Turkey are treated now.

 

[Tranona]

I doubt there will be any problems with VAT status on existing EU boats as long as they remain in same ownership but, suspect VAT may be payable if they change ownership and then either move to UK from EU or from UK to EU, much the same as VAT paid boats purchased in Turkey are treated now.

Why would that be? All the pointers are to not very much changing if the EU has its way or a limited free trade deal leaving much of the present structures in place including VAT. On the other hand if there is "No Deal" then who knows what will happen. The latter is not likely to come about because not enough MPs have the bottle to vote for it - irrespective of party.

 

[Poignard]

What might be the VAT liability (if any) on my British-registered 50-year old boat, currently kept in France, on which VAT has never been paid because she was built before the tax was introduced if, post-Brexit

a) I keep her in France, or

b) I bring her back to the UK?

 

[jordanbasset]

My understanding is that if a non E.U. resident buys an E.U. VAT paid boat in the E.U. it loses it's VAT paid status, is that right?

 

[GrahamM376]

Why would that be? All the pointers are to not very much changing if the EU has its way or a limited free trade deal leaving much of the present structures in place including VAT. On the other hand if there is "No Deal" then who knows what will happen. The latter is not likely to come about because not enough MPs have the bottle to vote for it - irrespective of party.

The vote was to leave the EU. We already have the situation where, if I buy your VAT paid boat from you in Greece it keeps its status whereas if the transaction takes place in Turkey, I have to pay VAT on import. The negotiations and terms so far are a joke and I'm pessimistic about how some states may treat boats if they see a chance of screwing them for tax.

 

[Tranona]

My understanding is that if a non E.U. resident buys an E.U. VAT paid boat in the E.U. it loses it's VAT paid status, is that right?

No. The citizenship or residence of the buyer and seller is irrelevant. The only important thing is the nature of the transaction. If VAT has been paid and the transaction is between 2 private persons then it is not a chargeable event.

The only situation where a previously VAT paid boat can lose that status is if it leaves the EU for a period of time (notionally 3 years) and particularly if it changes ownership while outside the EU.

 

[Tranona]

The vote was to leave the EU. We already have the situation where, if I buy your VAT paid boat from you in Greece it keeps its status whereas if the transaction takes place in Turkey, I have to pay VAT on import. The negotiations and terms so far are a joke and I'm pessimistic about how some states may treat boats if they see a chance of screwing them for tax.

But there has not been a vote on the terms under which we are leaving, nor of our future relationship with the EU. Whatever the eventual agreement is it will be with the EU so there is no chance of any individual state treating boats any differently from what is agreed.

You are stating the obvious about the difference between buying a boat in Greece (or any EU state) and buying one from a third country such as Turkey - which is in this respect no different from any other third country. The key issue is what specific terms in respect of VAT in general and movement of boats is agreed with the EU, and that does not have to follow any particular existing model.

 

[AndersG]

If it is a EU VAT paid boat now it should keep the same status regardless of home port, location at Brexit or flag.
If the same boat changes ownership in the UK after brexit I don't think it will keep the EU VAT paid status since it has changed hands outside the EU VAT area.