PAying VAT on imported boat

[Robin]

If we were to buy a Jersey registered but non Uk tax paid boat:-

How long after purchase do we have to declare and pay VAT due in UK?

In mean time could we use outside of EU ( for example in Channel islands waters)?

Not trying to dodge VAT (as if!) just mentally going through the delivery trip and clearance requirements. Quite possibly we might want to initially arrive via GY to arrive UK mainland say in Poole then move on to another South coast port after collecting personal belongings from local storage there.

TIA

Robin

 

[Sticky Fingers]

I think superheat6k did exactly this thing, perhaps a PM to him?

 

[Tranona]

Yes, superheat posted in detail his experience. pm him if you can't find the threads. Nothing difficult about it and predominately a paper exercise.

However if you do get into this situation there may be value in paying VAT in France if you intend cruising mostly in the "new" EU. See the long threads on the subject - but essentially rules are likely to change post 2019 so there is some uncertainty about the system that will be in place after that.

 

[Bathdave]

The answer depends on your own residence

I think you may be currently a US resident who is thinking of returning to live in the UK?

A UK resident buying a non VAT paid boat and importing it to the uk has to declare it on first arrival in the U.K., and pay the VAT

If you are not UK resident and don't intend to become one, I don't believe you need to 'import' the boat or pay VAT as long as you comply with the rules on length of time the boat is in the U.K.

If you are not a UK resident but plan on becoming one again, you can import a boat as part of your personal chattels free of VAT provided you have owned it for 6 months...so you might think of planning the timing of your return if the boat is valuable enough!

 

[Robin]

The answer depends on your own residence

I think you may be currently a US resident who is thinking of returning to live in the UK? yes

A UK resident buying a non VAT paid boat and importing it to the uk has to declare it on first arrival in the U.K., and pay the VAT

If you are not UK resident and don't intend to become one, I don't believe you need to 'import' the boat or pay VAT as long as you comply with the rules on length of time the boat is in the U.K. Understood but we are returning for good.

If you are not a UK resident but plan on becoming one again, you can import a boat as part of your personal chattels free of VAT provided you have owned it for 6 months...so you might think of planning the timing of your return if the boat is valuable enough!

It is valuable in our terms, as in being cash poor pensioners, but not so much so as to be worth starting a battle with the VAT man or HMRC. I was thinking more in terms of buy boat, sail to Poole stay a week or 10 days there to pick up supplies and belongings being shipped over from USA, then move on to our new permanent home and sort out the VAT in more relaxed mode when we arrive there. It might actually be beneficial as 'evidence' of our return to full time UK residency to have the VAT receipt to show intent to become dutiful tax payers again..

 

[PaulR]

We bought our boat secondhand in guernsey in late 14, broker suggested we were wisest not to visit france on way home to uk in case french authorities insisted on our paying vat to them as first eu port of arrival, we sailed to weymouth, flew q and reported via phone to hmrc who said ok to lower q, no quesrion raised re vat so we pointed out. boat was not vat paid and we were importing her. Were given number to call, answerphone left message, when no response rang again a few days later and a few days after that very pleasant hmrc chap called, he explained process which involved him emailing form for us to compkete and return. On receipt of form he sent through vat bill for us to pay, on payment vat receipt sent to us, all painless apart from cost

 

[macd]

It is valuable in our terms, as in being cash poor pensioners, but not so much so as to be worth starting a battle with the VAT man or HMRC. I was thinking more in terms of buy boat, sail to Poole stay a week or 10 days there to pick up supplies and belongings being shipped over from USA, then move on to our new permanent home and sort out the VAT in more relaxed mode when we arrive there. It might actually be beneficial as 'evidence' of our return to full time UK residency to have the VAT receipt to show intent to become dutiful tax payers again..

Robin: the relief on 'chattels' that BathDave mentions is a right, albeit a discretionary one. Attempting to claim it need not be a battle, and the fact that it actually is your home is an important factor. However, arranging to meet the six months qualification may be inconvenient to you.

Strictly speaking, VAT becomes due at the moment of importation and you should declare your circumstances on first arrival (whether intending to pay VAT or claim relief). However, as Paul's post shows, HMRC are fairly relaxed about it.

There's no reason you can't seek HMRC's advice on these matters in advance. I've always found them quite human and helpful with honest enquiries. (I was for many years VAT-registered.)

 

[Robin]

Robin: the relief on 'chattels' that BathDave mentions is a right, albeit a discretionary one. Attempting to claim it need not be a battle, and the fact that it actually is your home is an important factor. However, arranging to meet the six months qualification may be inconvenient to you.

Strictly speaking, VAT becomes due at the moment of importation and you should declare your circumstances on first arrival (whether intending to pay VAT or claim relief). However, as Paul's post shows, HMRC are fairly relaxed about it.

There's no reason you can't seek HMRC's advice on these matters in advance. I've always found them quite human and helpful with honest enquiries. (I was for many years VAT-registered.)

Thanks Mac, I too was VAT registered for over 25 years and never had any problem dealing with them either. I understand the chattels relief but in terms of the boat it's purchase would be coincident with our return and doing that and staying away another 6 months would be a bit contrived and seen as such possibly. not worth the risk/hassle methinks. As It is the broker concerned seems reluctant to consider us serious buyers and is not answering my very basic questions a week on, so it may be pie in the sky anyway and we will simply walk away and find another, tax paid, boat, :disgust:

 

[Robin]

We bought our boat secondhand in guernsey in late 14, broker suggested we were wisest not to visit france on way home to uk in case french authorities insisted on our paying vat to them as first eu port of arrival, we sailed to weymouth, flew q and reported via phone to hmrc who said ok to lower q, no quesrion raised re vat so we pointed out. boat was not vat paid and we were importing her. Were given number to call, answerphone left message, when no response rang again a few days later and a few days after that very pleasant hmrc chap called, he explained process which involved him emailing form for us to compkete and return. On receipt of form he sent through vat bill for us to pay, on payment vat receipt sent to us, all painless apart from cost

THank you, a very helpful reply of what happens in practice. I'm wondering how many are dishonest mind and never bother re the VAT but that is not my intent at all which is only to avoid being snowed under with paperwork when least expected and most unwanted. We often used to go direct to Poole from GY and vice versa so no hassle to not go via Cherbourg as we are no longer drinkers needing to refuel wine tanks. We would expect to arrive however with a tankful of tax free GY diesel!

 

[superheat6k]

Plenty of places tell you you have to pay VAT, but not many places how you go about it. Even Customs Notice 8 does not explain the process for actually paying the VAT.

I spoke with the small craft unit in Portsmouth - 0300 051 6922

1 Buy the boat and have the invoice only show importable goods. Services provided in Jersey, e.g. Brokerage fees, do not need to be part of your VAT payment, but be sensible with any offsets or deductions, HMRC are not fools. I made a separate agreement to pay the broker his fee on behalf of the purchaser.

For use whilst still in Jersey check with the Jersey HM they will know their rules. I did have to show my purchase invoice to be able to buy duty free fuel on my departure, and make sure the Broker declares the sale to Jersey HM who will lee-list it, but this is not an issue at all.

One strange thing was that when we went to collect the boat we took our dog. We were not allowed to take our dog onto the boat in QE Marina, and had to move the boat out to the waiting pontoon. Something to do with French dogs not being allowed to land - ours is a french breed, born in England.

2 Fill out the normal C1332 Part 2 (part 1 is for an outward voyage which will not exist) and notify the HMRC yacht unit at Dover of your arrival as normal. I also informed them it was an import from CI and I was in contact already with the Small craft unit. No arrival inspection was required. I did fly Q Flag until advised I could haul it down i.a.w. proper procedure.

3 Within a couple of weeks fill out form C384 and send to HMRC Small Craft unit with a copy of the boat's purchase invoice.

4 HMRC SCU will send you their VAT invoice, which you pay in the normal way, but make sure you get a payment receipt as the departments find taking to each other difficult and I had to prove separately I had paid, I was then send a stamped receipt version of the C384 which is now laminated as my VAT paid proof. The amount is the current % Vat on the purchase price and this is non negotiable. They did not pass an opinion on the purchase price nor invoice.

As I was changing the boat's name I requested they show both the old and new names on the C384 for avoidance of doubt at a later date and they were quite amenable to that.

Be aware that once you contact the Small Craft unit you are on their radar. They did visit me and were very pleasant as my boat was conveniently moored en route to SIBS, which was on at the time.

PM me any questions I have not answered.

 

[Robin]

Plenty of places tell you you have to pay VAT, but not many places how you go about it. Even Customs Notice 8 does not explain the process for actually paying the VAT.

I spoke with the small craft unit in Portsmouth - 0300 051 6922

1 Buy the boat and have the invoice only show importable goods. Services provided in Jersey, e.g. Brokerage fees, do not need to be part of your VAT payment, but be sensible with any offsets or deductions, HMRC are not fools. I made a separate agreement to pay the broker his fee on behalf of the purchaser.

For use whilst still in Jersey check with the Jersey HM they will know their rules. I did have to show my purchase invoice to be able to buy duty free fuel on my departure, and make sure the Broker declares the sale to Jersey HM who will lee-list it, but this is not an issue at all.

One strange thing was that when we went to collect the boat we took our dog. We were not allowed to take our dog onto the boat in QE Marina, and had to move the boat out to the waiting pontoon. Something to do with French dogs not being allowed to land - ours is a french breed, born in England.

2 Fill out the normal C1332 Part 2 (part 1 is for an outward voyage which will not exist) and notify the HMRC yacht unit at Dover of your arrival as normal. I also informed them it was an import from CI and I was in contact already with the Small craft unit. No arrival inspection was required. I did fly Q Flag until advised I could haul it down i.a.w. proper procedure.

3 Within a couple of weeks fill out form C384 and send to HMRC Small Craft unit with a copy of the boat's purchase invoice.

4 HMRC SCU will send you their VAT invoice, which you pay in the normal way, but make sure you get a payment receipt as the departments find taking to each other difficult and I had to prove separately I had paid, I was then send a stamped receipt version of the C384 which is now laminated as my VAT paid proof. The amount is the current % Vat on the purchase price and this is non negotiable. They did not pass an opinion on the purchase price nor invoice.

As I was changing the boat's name I requested they show both the old and new names on the C384 for avoidance of doubt at a later date and they were quite amenable to that.

Be aware that once you contact the Small Craft unit you are on their radar. They did visit me and were very pleasant as my boat was conveniently moored en route to SIBS, which was on at the time.

PM me any questions I have not answered.

Many thanks indeed, real experience trumps theory every time!

I like the 2 weeks to do the paperwork and start the payment procedure, it will give me time if necessary to get funds moved from 'incompetencebankingusa.com' over to 'firstworldbanking. co.uk'.

 

[Sticky Fingers]

I think superheat6k did exactly this thing, perhaps a PM to him?

Wot I suggested...

 

[Robin]

Wot I suggested...

Indeedy it was.:encouragement:


Nothing definite yet as we are stuck sorting out USA crap still, have more tyre kickers looking at our condo tomorrow and still got two cars to dispose of, not to mention shipping our accumulated 'stuff' and finding somewhere it can go temporarily until we get there and actually have a new floaty box to put it all on. Exciting but frightening-all-in-one.

 

[superheat6k]

Many thanks indeed, real experience trumps theory every time!

I like the 2 weeks to do the paperwork and start the payment procedure, it will give me time if necessary to get funds moved from 'incompetencebankingusa.com' over to 'firstworldbanking. co.uk'.

The suggested two weeks is for you to submit your paperwork and C384 to HMRC. They will then take similar to get an invoice to you and you then can take another two issuing your payment, so time is on your side in this regard.

Have you found a boat then ?

 

[Robin]

The suggested two weeks is for you to submit your paperwork and C384 to HMRC. They will then take similar to get an invoice to you and you then can take another two issuing your payment, so time is on your side in this regard.

Have you found a boat then ?

I thought we had a definite maybe, a sailboat mind but further questioning of the broker and pics seen enlarged had me say thanks but no thanks unless the owner would accept an offer he would probably find insulting even though it was realistic for a boat with teak deck problems, old electronics and over 20 year old rigging. AT least now a boat listed as not tax paid is worth more research than I had previously given just because I didn't know how it worked. This particular one I might have looked at if we and the boat were on the mainland UK, but even then paying for a trip to JY and a day, maybe 2 of time plus probable overnight hotel would have me thinking very hard before acting. Location AND price matters!

 

[Sybarite]

THank you, a very helpful reply of what happens in practice. I'm wondering how many are dishonest mind and never bother re the VAT but that is not my intent at all which is only to avoid being snowed under with paperwork when least expected and most unwanted. We often used to go direct to Poole from GY and vice versa so no hassle to not go via Cherbourg as we are no longer drinkers needing to refuel wine tanks. We would expect to arrive however with a tankful of tax free GY diesel!

As far as France is concerned the Douane has a pre-emptive right to buy your boat at the value you declare. I don't know if the same applies in the UK.

 

[Frogmogman]

I've heard that this is so in France too. I don't know if it is a right that is ever exercised by the Douane.

The customs being able to say "So, you reckon this beautiful yacht is worth only ten grand ? Fair enough, we'll buy it" slightly reminds me of the loophole in ancient Greece, where a citizen who had been required to pay a liturgy to support, say, the running costs of a trireme for a year could escape the financial obligation by pointing out another citizen who was richer than he, but who had yet to be taxed in this way. The second citizen thus identified could either then agree to pay for the trireme or agree to exchange his wealth with that of the first citizen (thus proving that he was poorer than his accuser).