Post Brexit Cruising

[Chris_Robb]

Millions of people in the UK will have been born as EU citizens and and at least a portion of the tax they pay will have gone into EU coffers but they will lose their EU citizen status and have no residual credit or benefit for the tax they contributed to the EU and will still be contributing to the "buy-out" fee to the EU. Why would boats be treated any more generously?

Because a boat is categorised as a "Means of Transport (MOT) under EU customs territory laws. This covers cars, aircraft etc. It is specific and would require major retrospective legislation to EXCLUDE a boat where VAT was paid in the UK. It will not follow what happens to the citizen itself. You keep referring to a relationship to Vat and the person. This is just so wrong - they have no connection what ever, and to talk that way just confuses the argument.

Place your bets.....

 

[Irish Rover]

Because a boat is categorised as a "Means of Transport (MOT) under EU customs territory laws. This covers cars, aircraft etc. It is specific and would require major retrospective legislation to EXCLUDE a boat where VAT was paid in the UK. It will not follow what happens to the citizen itself. You keep referring to a relationship to Vat and the person. This is just so wrong - they have no connection what ever, and to talk that way just confuses the argument.

Place your bets.....

I don't think I referenced a relationship between VAT and a person previously although I did say that the registration state of the boat may have a bearing on it's VAT status in the future. My most recent post was, I imagine you realise, more tongue in cheek. Guys like me and a few others on here, who have nothing better to do, pontificate endlessly and to no purpose about this kind of thing whereas I appreciate you are involved in an organisation which will be trying to have an input and make a difference. Best of luck with it.

 

[GrahamM376]

I don't think I referenced a relationship between VAT and a person previously although I did say that the registration state of the boat may have a bearing on it's VAT status in the future.

At the moment, whether VAT is payable or not depends on the location of the sale/purchase and where it's taken to afterwards, regardless of where registered. Can't see why this should change.

 

[Irish Rover]

At the moment, whether VAT is payable or not depends on the location of the sale/purchase and where it's taken to afterwards, regardless of where registered. Can't see why this should change.

You may well be right - or wrong, just like me.

 

[macd]

At the moment, whether VAT is payable or not depends on the location of the sale/purchase and where it's taken to afterwards, regardless of where registered. Can't see why this should change.

If I might augment that: "where it's taken to afterwards [and under whose ownership], regardless of where registered"

If the owner is an EU resident and the boat enters the EU (which, strictly speaking, includes its waters), VAT is payable. There is no eligibility for Temporary Importation. Conversely, if the owner is not EU-resident, the boat is eligible for TI and VAT payment is conditionally waived.

This is, of course, nothing to do with Brexit, just the rules applicable to vessels owned by any 'third country' resident now. Those rules are unlikely to change, although the specific way they apply to a departing EU state may do.

 

[Tranona]

At the moment, whether VAT is payable or not depends on the location of the sale/purchase and where it's taken to afterwards, regardless of where registered. Can't see why this should change.

To be precise in the case of means of transport VAT is payable in the state where it is first put into use which is not necessarily where it was purchased. So you could quite easily have a boat made and purchased in the UK and shipped to Portugal with VAT paid there.

Because of the differential VAT rates this can give rise to legitimate VAT reduction schemes such as the common one of Swedish boats being delivered to Germany, paying the lower (19%) VAT, kept there for a short period then sailed back to Sweden (where VAT is 25%) as used boats. Similar deals available on German boats destined for higher VAT rate states. Of course you have to do the sums to see if it is worth it and accept the delayed delivery time. However up to 6% on an HR or a Sirius is serious wedge.

 

[GrahamM376]

To be precise in the case of means of transport VAT is payable in the state where it is first put into use which is not necessarily where it was purchased. So you could quite easily have a boat made and purchased in the UK and shipped to Portugal with VAT paid there.

Because of the differential VAT rates this can give rise to legitimate VAT reduction schemes such as the common one of Swedish boats being delivered to Germany, paying the lower (19%) VAT, kept there for a short period then sailed back to Sweden (where VAT is 25%) as used boats. Similar deals available on German boats destined for higher VAT rate states. Of course you have to do the sums to see if it is worth it and accept the delayed delivery time. However up to 6% on an HR or a Sirius is serious wedge.

That's understood for new boats but I assumed existing boats were being discussed. Lets look at second hand VAT paid boats. My boat is EU VAT paid, in common with the majority of UK boats travelling abroad. I suspect/hope that boats already EU VAT paid will retain their status whilst in the same ownership so still free to roam the EU, although owners may be time restricted.

However, at the present time, if I take my boat out of the EU to (say) Morocco and sell it to you, then you have to pay VAT if/when you bring it back into the EU. I wonder if, after Brexit, the same will apply to the UK as it does now to Morocco in that a second hand UK owned boat exported to an EU state will be due VAT there and vv an EU second hand boat imported to the UK will be due VAT here - assuming of course we don't remain in the Customs Union etc.

P.S. We also don't know how Returning Goods will be treated after Brexit. How will boats which have been long term in the EU but outside the UK be treated if/when they return. Too many questions and no answers so far.

 

[macd]

However, at the present time, if I take my boat out of the EU to (say) Morocco and sell it to you, then you have to pay VAT if/when you bring it back into the EU. I wonder if, after Brexit, the same will apply to the UK as it does now to Morocco in that a second hand UK owned boat exported to an EU state will be due VAT there and vv an EU second hand boat imported to the UK will be due VAT here - assuming of course we don't remain in the Customs Union etc.

That's one of the great unknowns, Graham. Or possibly two unknowns, since in the longer term, the practice adopted by the UK may diverge from that of the EU.

FWIW, my leaning is towards the scenario suggested (elsewhere) by Tranona, i.e. that some sort of transitional arrangements will be made for existing craft, similar in type to those which originally incorporated boats into a common VAT system, including the 'VAT deemed paid' category. (This is 'transitional' in the sense it was used then, as distinct from the proposed 'Transitional Period' likely to begin after Brexit day.) I'm far from saying that this is bound to happen, but we do know that the EU has a repeated history of such measures and that it tends to follow existing blueprints.

On the smaller matter of UK-owned boats whose VAT was actually paid in the EU27, it is already an underpinning rule that end-users cannot pay VAT twice on the same means of transport (or on most goods in general). This status can of course be lost by long absence from or sale outside the EU, but in many instances it will not have been. I have a particular interest in this since our boat was originally VAT-paid in Spain. It's my expectation that this status will survive Brexit, although I'm not about to guarantee it

 

[Tranona]

In an ideal world one might see a boat pasport type system where the status of the boat and what you can do with it is officially recorded under a schedule that covered all the possibilities. However despite the love in the EU for detailed rules they do tend to just want to set the highest level principles and then let individual states deal with operational issues. UK government is also averse to too much detail, particularly if it involves cost in setting up and maintaining records.

There have been no pronouncements so far on VAT in any form from either side and it could be that this is an area where there will be no divergence and we could remain in the EU VAT area. This may be driven by the Irish border issue as VAT will be one of the problems to resolve.

If that happens our post count on here will fall significantly!

 

[Irish Rover]

In an ideal world one might see a boat pasport type system where the status of the boat and what you can do with it is officially recorded under a schedule that covered all the possibilities. However despite the love in the EU for detailed rules they do tend to just want to set the highest level principles and then let individual states deal with operational issues. UK government is also averse to too much detail, particularly if it involves cost in setting up and maintaining records.

There have been no pronouncements so far on VAT in any form from either side and it could be that this is an area where there will be no divergence and we could remain in the EU VAT area. This may be driven by the Irish border issue as VAT will be one of the problems to resolve.

If that happens our post count on here will fall significantly!

Boat passports
I doubt VAT is even on the agenda insofar as discussions on Northern Ireland and the border are concerned. NI is not a customs or fiscal issue. It is something much more fundamental than that.

 

[maxi77]

Unless some special deal is done VAT will be irrelevant as far as the EU is concerned for UK vessels as we will be Non EU vessels and thus subject to that regime. Considering just how much other little points have to be resolved by the end of 2020 I doubt if this will get anywhere near the negotiation table. It could be a time of big change for all those who keep UK boats elsewhere in the EU. I do hope they sort it out before it is too late

 

[Chris_Robb]

Unless some special deal is done VAT will be irrelevant as far as the EU is concerned for UK vessels as we will be Non EU vessels and thus subject to that regime. Considering just how much other little points have to be resolved by the end of 2020 I doubt if this will get anywhere near the negotiation table. It could be a time of big change for all those who keep UK boats elsewhere in the EU. I do hope they sort it out before it is too late

A NON EU vessel can still be VAT paid - I know plenty. They get Free circulation. Itsw about the VAT status of the boat which was paid whilst the UK was a member and therefore contributed on that payment to the EU. So long as the vessel stays in the EU that free circulation will remain irrespective of who the owner is. We must get away from muddling the vessel, defined as a means of transport, and the individual, who will be bound by totally different rules.
Yes if you sell outside the EU, the vessel (not you) will loose the vat status, and again if it comes to the UK for 3 years, you will loose the VAT status.

Vessels are not really the issue - under Temporary Import (non vat paid) or Free circulation it will work for the vessel. The problem is what arrangement the individual will have. Will it be 90 days in 180, and will there be annual tourist Visas - as the down unders currently can get.

Both will be sorted out - we will not be at the bottom of the list becasue Means of Transport cover cars aircraft vessels etc and will be a major item on the list to agree. As will be the movement of people for tourism. The individual countries such as Spain Italy Greece and Germany - and probably Croatia have too much at stake in tourism to not sort something pretty sensible out.

 

[Tranona]

Boat passports
I doubt VAT is even on the agenda insofar as discussions on Northern Ireland and the border are concerned. NI is not a customs or fiscal issue. It is something much more fundamental than that.

Well, it will be. although as you say there are more fundamental problems to be resolved, although some of the hype could have been avoided if the approach to resolving them had been positive rather than negative. But VAT is an issue if there is any border whether it is hard or as is more likely virtual in some way.

 

[Irish Rover]

Well, it will be. although as you say there are more fundamental problems to be resolved, although some of the hype could have been avoided if the approach to resolving them had been positive rather than negative. But VAT is an issue if there is any border whether it is hard or as is more likely virtual in some way.

VAT and customs tariffs are issues between the UK and the entire EU. If the UK wants to leave the customs union then a way will have to be found to accommodate the unique situation of Ireland and the Good Friday Agreement but I can't see how that will impact on boats generally or the issue being discussed here. If the UK remains in the customs union because another solution cannot be found in relation to the NI border then that's an entirely different matter.

 

[Chris_Robb]

Well, it will be. although as you say there are more fundamental problems to be resolved, although some of the hype could have been avoided if the approach to resolving them had been positive rather than negative. But VAT is an issue if there is any border whether it is hard or as is more likely virtual in some way.

There are different rates of VAT and duty on Booze and fuel north to south, so that works OK - well is probably ignored.... So what will be new?
To try and work out the arrangement before we even know what the arrangement with the EU is is a bit cart before the horse - but then it is Ireland -

My Granny was Irish - do I get a passport?

 

[maxi77]

A NON EU vessel can still be VAT paid - I know plenty. They get Free circulation. Itsw about the VAT status of the boat which was paid whilst the UK was a member and therefore contributed on that payment to the EU. So long as the vessel stays in the EU that free circulation will remain irrespective of who the owner is. We must get away from muddling the vessel, defined as a means of transport, and the individual, who will be bound by totally different rules.
Yes if you sell outside the EU, the vessel (not you) will loose the vat status, and again if it comes to the UK for 3 years, you will loose the VAT status.

Vessels are not really the issue - under Temporary Import (non vat paid) or Free circulation it will work for the vessel. The problem is what arrangement the individual will have. Will it be 90 days in 180, and will there be annual tourist Visas - as the down unders currently can get.

Both will be sorted out - we will not be at the bottom of the list becasue Means of Transport cover cars aircraft vessels etc and will be a major item on the list to agree. As will be the movement of people for tourism. The individual countries such as Spain Italy Greece and Germany - and probably Croatia have too much at stake in tourism to not sort something pretty sensible out.

I hope your optimism is justified, but I really fear some of our politicians throwing their rattles out of the pram when they realise they cannot have their cake and eat it. I am not really convinced our team have any real comprehension of just how much work is involved, the fact we have only just about got the heads of agreement settled after one year and just over 2.5 years for the rest,the mind boggles. Still miracles happen

 

[colind3782]

My Granny was Irish - do I get a passport?

Yes

 

[rustybarge]

Does anyone know the VAT paid confirmation form you can get from HMRC for an old boat that hasn't still got the original bill of sale available?

I think it's something like 2tl something or other?

I'm interested in buying an 1980's boat that is in Portugal , but has no vat receipt. Do HMRC require evidence to issue a receipt, or is it good enough to have the hull serial number?

Tia.

 

[macd]

Does anyone know the VAT paid confirmation form you can get from HMRC for an old boat that hasn't still got the original bill of sale available?

I think it's something like 2tl something or other?

I'm interested in buying an 1980's boat that is in Portugal , but has no vat receipt. Do HMRC require evidence to issue a receipt, or is it good enough to have the hull serial number?

Tia.

It's T2L. Further info here:
http://www.rya.org.uk/knowledge-advice/boating-abroad/Pages/t2l.aspx

Supporting evidence of VAT status is required. The hull number will be meaningless.

A pre-'85 boat may be officially "deemed VAT paid". To support this, you will need evidence of when it was built, and something such as a marina receipt to confirm that it was physically in the EU on 31st December 1992.

 

[rustybarge]

It's T2L. Further info here:
http://www.rya.org.uk/knowledge-advice/boating-abroad/Pages/t2l.aspx

Supporting evidence of VAT status is required. The hull number will be meaningless.

A pre-'85 boat may be officially "deemed VAT paid". To support this, you will need evidence of when it was built, and something such as a marina receipt to confirm that it was physically in the EU on 31st December 1992.

Thanks Mac for your very informative response.

A combination of a T2l form 'and, or' the last few owners bill of sale should do the job well enough.