Tax on Jersey boat purchase?

[mike88]

I have done a search for this on the forums but cant find an answer to my question so apologies for asking if the subject has been brought up before! We are looking at buying a boat which is currently in Jersey, we would be wanting to bring it back to our berth in Portsmouth Harbour. Having never purchased a boat from the Channel Islands before can anyone tell me what the tax implications are on doing this, ie do we have to pay VAT or any other taxes when taking it from the CI back to the UK. We have asked the owner and he believes that it may be exempt from tax because of the age of the vessel (1973) but I wanted to make sure before we go any further. He also mentioned that if it was subject to VAT it may be at a lesser rate because the boat needs a little tidying/updating so would be described as a 'project'. Would be grateful for any advice anyone could give.
Many thanks in advance.

 

[georgeo]

cannot comment on the specifics (cos I is ignorant on these matters!) but yes, generally speaking, HM customs would be wanting their cut

 

[PeterGibbs]

I believe the cutoff for VAT registration only applies to vessels in the EU at that time. The Channel Islands are regarded as being utside the EU for these purposes.

If you import it officially and declare it for VAT, you will be assessed at market value - I can't see how a "project" declaration would reduce your liability. Naturally you would have some supporting evidence to argue for a low valuation. You cannot depend on the sale document alone being taken as the valuation.

HMCR issue booklets on their rules - well worth reading up - available on line.

Or you could keep it officially in the Channel Islands, tootle back and forth, and avoid all those issues, eat lots of Jersey fudge and live a happier life than many of us have any right to dream of!

PWG

 

[gjgm]

you can hunt through the web pages to find HMCE guidance, or a phone number.Generally though they only give out the standard response, not a one to one specific.
I d assume you ll be paying VAT and maybe import tax (1.5pct?).

 

[macd]

Generally speaking, if a boat is exported from the EU, even if VAT has already been paid, it becomes payable again if the vessel is sold outside the EU then re-imported. (Hence the common practice in Turkey when VAT-paid boats change hands: sail across to a Greek island and complete the sale there.)

However, you're talking of a boat which may be 'deemed VAT paid' by virtue of age. Note that age in itself is not sufficient: if it was built before 1 January 1985 AND was in the EU at midnight on 31 December 1994, it may be 'deemed VAT paid'. You would need evidence, such as a mooring receipt, for this date.

If VAT is payable it would be at 17.5% of the value of the boat. This would be the VAT man's determination of its value, not yours, although the sale price would obviously be one factor in determining this.

 

[rosie]

I did this 3 years ago. I imported my boat to the east coast after having owned it and operated it in CI for some 10 years. I had great difficulty finding anyone in HMC who was remotely interested - lots of duff telephone nos etc, and could not find anyone on the south coast (first point of entry) who would deal with it. I finally found a helpful guy at Felixstowe (who was a yottie himself) so sailed all the way to Levington flying Q flag! I did the business in the HMC office and we agreed a current value for the boat without involving a formal valuation. He reserved the right to come and inspect the boat but in the event never did. Although it was painful to hand over the money I was content that we did a fair deal. Incidentally, they did not accept a credit/debit card and wanted either cash or a bankers draft.

Your boat will be liable because it will be purchased outside the EU. As a matter of interest it would still be liable if it was a newish boat which was already VAT paid because it loses this status when a sale takes place outside the EU.

I had to negotiate a current value because I had bought the boat about 10 years before import. I would guess in your case they would value it at the purchase price.

Hope this helps. The RYA have lots of info about importation & VAT. Also HMC website has info.

Good luck!

Dave.

 

[mike88]

Thanks for all your advice & help. Think Im a little further enlightened on whats involved! The current owner bought the boat in the UK (Cornwall) and then motored over to Jersey. So originally she was built & 'lived' in the UK until being taken accross to Jersey, would that make any difference?

 

[RobBrown]

This is the main HMRC document link & you can download it from there:

http://customs.hmrc.gov.uk/channelsPorta...tyType=document

 

[Sailfree]

Yes but HM Customs will say "prove it".

Bill of sale listing the person in Cornwall and date sold?

I do wonder whether with an older boat customs ever checks up as in the grand scheme of things a few older boat sales to the Uk is small beer.

 

[wotayottie]

If so, then maybe the answer is to get him to bring the boat back to the UK and buy it from him whilst he is in (say) Portsmouth.

This needs checking up and I am deffo not an expert. But as I understand it, the sale of any UK boat is subject to vat if that sale is done outside the EU (which Jersey is) and that boat is then re-imported. Conversly if a boat leaves the UK but then returns and is sold after it has returned, it isnt subject to vat unless it was officially exported and the vat paid was re-claimed on export.

But I repeat - I do not know the above for sure so the best thing to do is to get advice from HMR&C. Dont rely on what I have said.

 

[MisterBen]

I imported a boat from Guernsey last April and found the process of paying VAT (which I think you will just have to grit your teeth and accept) straightforward. I was directed by the HMRC Yacht helpline to their Mr N Spearey, on 0117 984 3454, who was extremely helpful. He sent me the necessary forms in advance of my crossing to Falmouth. On arrival I completed them and returned them with a photocopy of the Bill of Sale and a cheque for 17.5% of the price. A month or so later I received the receipt and a confirmatory letter that VAT had been paid in full. Job done and conscience now clear.
Good luck.

 

[macd]

The issue seems to be whether the vessel was VAT paid or 'deemed VAT paid' before being exported to Jersey.
If she was, and if there is firm evidence of this, then if the sale to you is completed in the EU (not necessarily UK: France is handier), then VAT should not be due. However, as other posts recommend, double check this with the authorities.

If she was not VAT paid or deemed VAT paid before export, then VAT is probably due on import.

There could also be an RCD issue, since you are proposing to 'put the vessel into service ' (as the blurb goes) in the EEA (European Economic Area, not quite the same as the EU). RCD, Recreational Craft Directive, is a supposed standard for safety and seaworthiness. You probably don't want to go there.

Yes, it's a bloody minefield.