To VAT or not to VAT ?

[Driver42]

Hello all
I am looking to buy a sailing boat that is currently moored in Israel where the VAT was paid.
The boat is registered in Germany.
I've been told by the SSR that to enter it on the SSR it needs to be deregistered from Germany.
This should not provide too much of a challenge but should I "import" it ?
It was built in 1996

 

[Driver42]

I need to add that I do not intend to bring it back to the UK permanently but to live on it and sail wherever my heart desires.
I want to visit the UK in beer but what should I do regarding the VAT position ?
I've been reading but going round in circles.
Can I register the boat in the UK and continue sailing her without paying VAT as long as I do not land in the UK ?
If I return to the UK will I automatically be liable for VAT or is there a grace period or a limit to how long it can remain in UK waters without paying VAT ?
I would then sail away again. Mostly around the Med and Baltic seas but also further afield.

 

[Tranona]

On the assumption that you are a UK resident, the following are the rules.


Registration. This is nothing to do with VAT "status", but to give a national identity to the boat. If you are a UK resident you can register on either the SSR or Part 1. The latter is arguably better for a boat that never comes to UK but is more costly to set up and maintain. It is the sellers responsibility to deregister it.

VAT. You can use the boat in the EU for up to 18 months under Temporary Registration rules, although effectively there is little limit provided the boat leaves the EU after 18 months and re-enters. You, however if a UK resident (and citizen?) will be limited by the Schengen rules to 90 days at a time.

If you are UK resident VAT and recertification is due immediately on entry - no grace period.

Age of the boat is largely irrelevant, but with a 1996 certification will be difficult unless the boat was built in the EU or EEA.

You may wish to reconsider your plans in the light of these rules - they are not friendly towards your proposed cruising lifestyle!

 

[Driver42]

On the assumption that you are a UK resident, the following are the rules.


Registration. This is nothing to do with VAT "status", but to give a national identity to the boat. If you are a UK resident you can register on either the SSR or Part 1. The latter is arguably better for a boat that never comes to UK but is more costly to set up and maintain. It is the sellers responsibility to deregister it.



Thanks Tranona.
This was about what I worked out.
I hadn't considered the option of leaving the boat in EU waters but the information is useful for future consideration.
"If you are UK resident VAT and recertification is due immediately on entry - no grace period"
Recertification ?
Do you mean registering with SSR ?
The VAT situation is as I guessed.
Thanks

 

[Tranona]

All imports need to be certified (from next year) to the RCR which is the new UK equivalent to the EU RCD to get the UK equivalent of the CE mark. At the moment it seems that pre 1997 boats built in the EEA or EU will be exempt. You will need to prove where the boat was built. If it is not in the exempt category certification will be expensive and maybe not even possible, at least economically.

 

[daveg45]

All imports need to be certified (from next year) to the RCR which is the new UK equivalent to the EU RCD to get the UK equivalent of the CE mark. At the moment it seems that pre 1997 boats built in the EEA or EU will be exempt. You will need to prove where the boat was built. If it is not in the exempt category certification will be expensive and maybe not even possible, at least economically.

Best solution get a boat that is ex vat and worry about it if and when you take it to England. Incidentally does the 18 month rule apply to the uk? Can people just pop over France and reset the clock?

 

[Tranona]

Best solution get a boat that is ex vat and worry about it if and when you take it to England. Incidentally does the 18 month rule apply to the uk? Can people just pop over France and reset the clock?

Correct if your plans allow for that - but the choice of VAT unpaid boats is limited and not always the best solution. If you are non resident you can indeed get temporary importation into the UK. However once again the number of people who have this choice - or indeed want to exercise it is very limited.

For many UK citizens/residents the Schengen travel rules are a far bigger barrier to cruising plans than the VAT status of their boat - or of the boat they plan to buy.

 

[daveg45]

Correct if your plans allow for that - but the choice of VAT unpaid boats is limited and not always the best solution. If you are non resident you can indeed get temporary importation into the UK. However once again the number of people who have this choice - or indeed want to exercise it is very limited.

For many UK citizens/residents the Schengen travel rules are a far bigger barrier to cruising plans than the VAT status of their boat - or of the boat they plan to buy.

That doesn't sound good Tranona. I was talking to a dealer on the hamble about VAT and returning goods act. according to him there is an armistice until June 2022 or there about. Are you aware of anything along those lines?

 

[Tranona]

That doesn't sound good Tranona. I was talking to a dealer on the hamble about VAT and returning goods act. according to him there is an armistice until June 2022 or there about. Are you aware of anything along those lines?

It is very specific and relates only to those boats that were taken out of the UK more than 3 years before 31/12/20. Normally those would not be eligible for the returned goods scheme, but if the owner is the person who took it out, it can come back into the UK without paying VAT. Otherwise if it stays in the EU it will be EU VAT paid. The extension follows the difficulties of moving boats because of travel restrictions.

The number of boats likely to take advantage is probably extremely small.

Very clear information now on the rules on the RYA site and also good summary in the press such as YM.

 

[dunedin]

That doesn't sound good Tranona. I was talking to a dealer on the hamble about VAT and returning goods act. according to him there is an armistice until June 2022 or there about. Are you aware of anything along those lines?

This only applies if boat has previously been in the UK under the same ownership. So does not apply to boats bought now in the EU, seeking to return to the UK with new UK resident owner.