Latest Brexit Scare

[Hurricane]

A friend is in the process of buying a new boat so he emailed Ruth Corkin who made the comment on EU boats in that FT article to ask her where she got here source.
To her credit, she answered very promptly.

This was his email to Ruth Corkin

I was interested in your recent article in the FT which seem to suggest that British registered boats currently located in the EU would lose their Union Goods status (VAT – paid) if we leave the EU without a deal on the 31st December. I quote you from the article;
Ms Corkin warned that leaving a vessel in EU waters after 31 December could also cause EU tax liabilities for British boat owners. This is because the “VAT-paid” status currently enjoyed by British yachts in the EU only applies to EU-flagged craft. And after the UK leaves the EU and customs union, EU authorities may seek to charge VAT and duty on the value of the yacht. “There may be a double whammy at the EU end if the yachts stay in EU waters,” she said. “With Covid, each of the member states is going to want to fill its tax gaps and will be hunting for areas that are a quick win. And there’s the feeling that people who have a lot of money should be taxed more.”
I have research this and can find no reference to the registration of the vessel being a requirement to keep the Union Goods status of the vessel.
As you can imagine this has caused quite a stir for those of us, including myself, that have boats based in the EU which are VAT paid yet British registered.
Can you please advise your source for these comments?

My friend highlighted the text in the same was as I have above

Ruth Corkin's reply was this

I looked on the EU Commission website. I’ve had a few conversations around this matter this week and the “VAT paid” status issue is a grey area. Strictly it only applies to EU owned boats, although I have seen sight of an email from the EU Commission to the Cruising Association saying that the status will be retained. How this works when non-EU boats can’t take advantage of it is not clear and the EU Commission has not published anything.

Kind regards
Ruth Corkin
Director Indirect Tax
For and on behalf of Hillier Hopkins LLP

I deliberately haven't added my comments but it would be useful to hear what others have to say on the matter.

 

[andrewbarker]

@jrudge
Thanks - maybe that is a big fat line that we can draw if things get difficult.

Jrudge is correct and this is very worrisome. In essence the risk will hang over everyone who has a British VAT paid boat. If the EU deem that the boat has paid no VAT in the EU regardless whether VAT has been paid in the UK (and thus deem it an import), they will or could decide to charge VAT. Changing flags is unlikely to make any difference other than perhaps discouraging customs boats from targeting British flags and hence your boat. Given the fact that to date the UK government attitude towards the EU has been fairly insulting (at least in my view) and the added fact that our government does not seem to care too much about protecting the rights and assets of its citizens who travel, I am not confident one can look to Boris for help here. I am open to correction but I suspect that the ONLY safe recourse is for all med owners of UK VAT paid boats to have TA on Jan 1 2021 regardless as to whether they have been in the med for years. This then becomes a really tricky one because if one applies for TA then unlikely you would ever be able to argue the case that UK VAT paid pre 2021 protects you. Ergo you would need to come in and out every 18 months - see post by Baggywrinkles.
[/QUOTE]

See below from RYA sent to me on 20 Oct

"According to the Union Customs Code and specific assurances from the EC if a boat is in an EU port or is on EU waters at the end of the transition period, no VAT becomes due as there is no VAT taxable event (no importation). Afterwards, the boat can freely sail within the EU without any VAT becoming due and without any time restriction."

Regards
Stuart Carruthers
RYA Cruising Manager

 

[Hurricane]

Jrudge is correct and this is very worrisome. In essence the risk will hang over everyone who has a British VAT paid boat. If the EU deem that the boat has paid no VAT in the EU regardless whether VAT has been paid in the UK (and thus deem it an import), they will or could decide to charge VAT. Changing flags is unlikely to make any difference other than perhaps discouraging customs boats from targeting British flags and hence your boat. Given the fact that to date the UK government attitude towards the EU has been fairly insulting (at least in my view) and the added fact that our government does not seem to care too much about protecting the rights and assets of its citizens who travel, I am not confident one can look to Boris for help here. I am open to correction but I suspect that the ONLY safe recourse is for all med owners of UK VAT paid boats to have TA on Jan 1 2021 regardless as to whether they have been in the med for years. This then becomes a really tricky one because if one applies for TA then unlikely you would ever be able to argue the case that UK VAT paid pre 2021 protects you. Ergo you would need to come in and out every 18 months - see post by Baggywrinkles.

See below from RYA sent to me on 20 Oct

"According to the Union Customs Code and specific assurances from the EC if a boat is in an EU port or is on EU waters at the end of the transition period, no VAT becomes due as there is no VAT taxable event (no importation). Afterwards, the boat can freely sail within the EU without any VAT becoming due and without any time restriction."

Regards
Stuart Carruthers
RYA Cruising Manager

[/QUOTE]
Thanks for posting.
I think thats how we all see it.

 

[DavidJ]

Yes thanks for that information.
I’m now practicing how to say in Spanish when I get pulled over
”No se adeuda el IVA ya que no existe un hecho imponible del IVA (no hay importación).”

No VAT becomes due as there is no VAT taxable event (no importation).

 

[Alicatt]

Interesting and informative thread, thanks to all.
As a Scotsman in Belgium -far, far, from the sea - with recently taken my wife and our friends out for a days cruise on the Friesland lakes to test the waters so to speak with my wife as to whether she would like to go boating, and the answer was a very positive yes.
Just now I'm in the process of becoming a Belgian citizen, my wife is Flemish and we live part time here in Belgium and part in Scotland. I was looking into going for my yachtmasters and ICC and also looking for a nice 8 to 10m cabin cruiser, it will not be my first boat but it will be something a bit more serious than my old 7.5m Dory day boat with a 75 Johnson on the back that I and friends used for diving off the coast.
I was looking into powerboat training being offered around Helensburgh on the Clyde as that is close to my home in Scotland, but on reading here I think I will have to look at something a bit closer in Belgium in both training and in a vessel.
As to the 90/180 it has been ignored pretty much where I live in Belgium, in 15 years I was only once asked about residency by a policeman and that was because he had a grudge against my next door neighbour here and he was trying to stir things up. But now with the Brexiteers getting their way I have to make things legal here, applied in July and been told I probably won't get an ID card until the end of January.

(I miss the sea, I miss my house on the cliff top overlooking the North Sea and Wick Bay)