Suntrekka - Rival 32 - History needed for VAT deemed paid

Its never been an issue in Beleza (another quick trip to the Classic boat forum to touch wood) she's 30 yrs old and I've been bumming around portugal and spain in her for the last 4 years, so I beleive that the customs lot abroad can't be bothered and are more interested in modern high value boats that look like ex charter boats.

They do like to see insurance, Registry, that you've got your ensign up and courtesy flag flying
 
VAT is never a problem when visiting other countries as it is nothing to do with them. The only time they would be interested is if they suspected the boat came from outside the EU and the intention was to import it. Before another drift starts the law is very clear on this and there is a mechanism for temporary importation.

As I said the only people who seem concerned are HMRC and as far as I know have never explained why! And their concerns seem to be only about subsequent owners having a document that is nether normally available, nor relevant.
 
Thank you for those views. I have to say I have mused on this situation for many years. However.........

What would be the position if I bought a 20 year old Westerly in Guernsey deemed 'No VAT paid' in the broker's ad.

Westerly would originally have charged VAT to the first owner and he would have claimed it back. Or at least, if the first buyer was a CI resident, HE would not be liable to pay initial VAT upon purchase.

By the logic of your statements, whatever went on and whatever VAT arrangements were applied is the business of the first owner and nothing to do with the boat, or subsequent owners.

I am therefore under no obligation to do anything about VAT status of the boat?

Would appreciate your comments.
 
A boat in Guernsey is outside the EU. If was originally sold in the UK the purchaser would have paid VAT to Westerly. If he subsequently took it outside the EU, the only way it could come back without paying VAT is if he brought it back himself. This would cater, for example for people who go on long trips and come back at the end. The boat can then be sold privately in the EU (not just the UK) without any VAT.

On the other hand if the boat was sold (even privately) outside the EU (say to a CI resident) it then ceases to have "VAT paid status". I use these words because that is what HMRC used in the badly worded document in 1992 to refer to boats built before 1985 when VAT became general in the EU (UK had VAT since 1973). The term is an oxymoron. A boat does not have any tax status in just the same way that your car or caravan, or indeed any other item on which VAT is levied does not have VAT paid status. However it does indicate that the boat cannot be "put into use", that is imported into the EU without paying duty and VAT (and probably requiring a CE mark - RCD and all that).

The same rules would apply if the boat was originally exported outside the EU and therefore no VAT paid. The RYA provides good and accurate guidance on this aspect of the VAT rules. It is basically the same for all EU states, but there might be variations at an operational level, for example setting the value for VAT, and now the rates vary, particularly with the recent fall in the UK. From memory, Malta, Cyprus and now UK have lower rates.

This explains why the value of a CI (or indeed any non EU boat that might have a market in the EU) is so low. Small boats like a Westerly Konsort would be 30-40% lower in CI as the VAT and cost of CE marking (which is largely fixed) would cost 25-30% of the purchase price. The difference of course gets smaller in percentage terms as the value of the boat rises and the CE cost stays constant.

Hope this helps

What a splendid piece of protectionist anti-consumer piece of legislation!
 
Thanks. Clear now. I had not fully understood the implications of the independence of CI and IOM.

One minor point. If it was a Westerly - or any other production boat - surely they would CE everything they built as a matter of course? Not doing so would be the equivalent of building a 'de-badged' model of a BMW - out of the normal production schedule and more expensive to the purchaser.

If all production boats are thus CE marked then the only issue is the VAT payable on import to UK. That surely, would depend on the current value and would be determined by the Bill of Sale?
 
Wish it were that simple. Most Westerlys were pre CE anyway. Even more modern boats that would have a CE mark and certificate may not actually have one issued if they are sold out of EU from new. Two reasons. First they might have items of kit that would not meet CE requirements, for example if they went to the US. Secondly builders dont issue the certification to prevent owners from selling what are probably lower priced boats back into the protected EU. Consumer shafted again.

However, if the boat basically complies it is easier, if the builder is prepared to give you the information to get the boat certificated than if starting from scratch.
 
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