Motorboat VAT - the vagiaries of EC Law.

[peterb26]

There have been quite a few posts about VAT recently.

Just in case anyone is thinking of moving a relatively new boat out of the UK (like I did recently) then here is the definitive on VAT.

This is basically a quote from a document I received from HMRC today.

If you take a newish UK VAT Paid boat to an EC country (with intent to remain there more than 6 months) then beware - you may well have to pay full VAT in the destination EC country and then go through the process of claiming back your UK Vat.

A number of conditions must be met before the destination EC country will accept that the UK Vat is the only one to be paid. These conditions are:-

a) The boat must be over 3 months old.
b) The boat must have more than 100 hours on the engine.

Unless your boat meets both of these conditions - then the destination EC country is within its rights to charge you their VAT at the point you enter the country.

Clearly the 3 month rule is unlikely to cause many people distress - but you could well have a 2 year old UK boat with less than 100 hours registered. Take it abroad for a long stay at your own risk. Especially if you were not the first owner who paid the full UK VAT - as I suspect it would be a nightmare trying to claim someone-else's VAT back!

 

[duncan]

looks like a response to a VAT scam (which of course may well be a legitimate UK process viewed as scam elsewhere.....)

unusual to have such clear guide lines re 'new' but they will be guidelines so the example you quote of a 2 year old boat with less than 100 engine hours on it's instruments wouldn't worry me.

come to think about it I don't think I would be too worried as a private individual / registered owner at all .... but that's just me reading betweeen the lines.

 

[Whitelighter]

This is all to do with NMT (New Means of Transport) VAT legislation. AM is right that is a boat (plane or car) is considered to be new, then the country of registration should charge the VAT, with the country of supply zero rating the VAT if sold to a VAT registered individual or business, or refunding the VAT if not.

 

[rickp]

Its all about preventing people from paying VAT on expensive but easily moveable objects in the country with the lowest rate.

Its also somewhat counter to the original common market aims - but when did that ever get in the way of Governments getting their grubby mits on (more of) your dosh....

Rick

 

[duncan]

some might claim that it wouldn't need to be counter if all the countries had the same level of vat - another aim?

/forums/images/graemlins/laugh.gif

 

[DavidJ]

This applies to me.
We bought the boat new from Sealine Hamble and organised transport to the Med. Spanish IVA (VAT) is 16% and UK 17.5%
So do I have the opportunity of making 1.5% ie about £2500 ???

 

[DAKA]

[ QUOTE ]
AM is right that is a boat is considered to be new, then the country of registration should charge the VAT, with the country of supply zero rating the VAT if sold to a VAT registered individual or business, or refunding the VAT if not.

[/ QUOTE ]


/forums/images/graemlins/confused.gif could this mean AM pays French VAT and the original purchaser can claim the 17.5% UK vat back leaving AM seriously out of pocket and the original owner with a nice little windfall !

 

[ExcaliburII]

Sounds a bit suspect to me.

Date of purchase is fairly easy to verify, but where does it say you have to have an engine hours meter fitted? And is its accuracy stipulated? If you're a bit short of hours, what's to stop you connecting the meter direct to the ship's battery for a couple of days to clock up the hours before you go?

 

[Whitelighter]

I would hope not, but full details are covered under notice 728 on the HMRC website

 

[peterb26]

In DavidJ's case - if the Sealine is to reside in Spain for more than 6 months and it was within 100 hours of being new when he took it there - then he most definitely can complete the New Means of Transport form and get his UK Vat back.

He will then have to pay Spanish vat at the appropriate rate and the Spanish will issue a Vat Receipt.

 

[peterb26]

Jez - reference your post saying "Country of Registration" charging the VAT - its actually the "country of destination" that charges the VAT.

My boat is SSR registered in the UK - but this made no difference and I still had to pay the Portuguese Vat when I brought it here.

 

[peterb26]

[ QUOTE ]
some might claim that it wouldn't need to be counter if all the countries had the same level of vat - another aim?

/forums/images/graemlins/laugh.gif

[/ QUOTE ]

Whether VAT rates are the same or not makes little difference Duncan.

Its all about "where the revenue ends up". So even if the Portuguese VAT rate was the same as the UK - the Portuguese IVA people would still exercise their legal right to claim the VAT on my boat - simply because Portugal was its end destination.

That way the IVA (VAT) ends up in the Portuguese coffers!

 

[duncan]

[ QUOTE ]
[ QUOTE ]
some might claim that it wouldn't need to be counter if all the countries had the same level of vat - another aim?

/forums/images/graemlins/laugh.gif

[/ QUOTE ]

Whether VAT rates are the same or not makes little difference Duncan.

Its all about "where the revenue ends up". So even if the Portuguese VAT rate was the same as the UK - the Portuguese IVA people would still exercise their legal right to claim the VAT on my boat - simply because Portugal was its end destination.

That way the IVA (VAT) ends up in the Portuguese coffers!

[/ QUOTE ]

agree and understand - I was poking fun at rick's suggestion that it might be counter to the aims of the EU. I believe the aims would include tax being paid to the destination country on new products so that's all OK!

 

[DavidJ]

[ QUOTE ]
In DavidJ's case - he most definitely can complete the New Means of Transport form and get his UK Vat back.


[/ QUOTE ]
I probably won't go through with it, but out of interest where do I get the form?

 

[peterb26]

You can download it (I think it has 4 different colour pages) from the HM C and E Website. Just search for NMT form or New Means of Transport.

 

[DavidJ]

I think I've left it too late re the Customs & Excise website FAQ's, I'm 5years down the road:

8.12 Must I submit the Form VAT 411 within a certain deadline?
Yes, you must submit this within six weeks of the end of the calendar quarter in which you have made the supply.