Unusual situation on importing a boat into the EU

[voyager35]

I am in au unusual and undesirable position with a 1987 UK vat paid boat.
Having lost the mast and sails this summer my boat is stuck in the EU. My insurers have declared the boat a total loss and are paying out its full insured value. They have offered to sell the salvage back to me for a small amount, which I am considering accepting.
As I am effectively purchasing the boat from them in the EU would this purchase require the boat to be imported into the EU and the vat paid.
If that isnt required it might be to my advantage to pay the VAT to import the salvage into the EU if I only had to pay the EU vat on the salvage value.
What do you think

 

[Tranona]

Don't think you will have to pay VAT if you bring it into the UK as if you owned it before it left the UK you will qualify for Returned Goods Relief. You are not "buying" it from the insurer but accepting a reduced payout to reflect the salvage value you agree with them. They will never own it. I am sure they will be only too pleased to do this and give you a letter with the payout that reflects your continuing ownership. They will not want to be left with a scrap boat in the EU so you will be able to drive a hard bargain to take it off their hands. Be aware that if it is coming back by truck you are looking at minimum £4-5k. If you think you can repair the boat yourself and make it usable for the payout less the shipping costs and storage while you fix it then offer them a nominal value. If not take the money and leave them with the scrap problem.


All depends on the money and how you value the finished boat, recognise it may be different from the market value.

 

[pandos]

If you wanted the boat in the EU and were intending to be an EU resident it would be a good time to import it, but will it pass RCD?.

If you could do the repairs in the EU and sail it back you may be liable for the vat on the value of the upgrades when you arrive in the UK but maybe you could get back the EU vat on the parts.

I think here are provisions for boats on passage getting vat free parts.

Bargaining with the insurers be aware that they may have dreamers who may have expressed an interest in buying the salvage boat. (I had this with a car and all he managed to do was inflate the amount the insurer wanted he was eventually persuaded by his boss that he didn't really want to buy my car)

Just my thoughts...

 

[Graham376]

I suspect you would have problems trying to import at very low (current) value. Customs would want to see all paperwork with history of boat and would see that it arrived complete with mast and sails, which would almost certainly be the value they would work on. If it's an old boat, doubtful if it would meet RCD requirements anyway.

 

[Tranona]

Thinking a bit more about if you want to repair it in the EU to avoid the cost of bringing it back to the UK. It is presumably currently in the EU under temporary admission so there is no need to import it into the EU unless you intend keeping it there permanently. Perhaps you need to talk to customs where the boat is located for their view as to whether they would charge VAT on the scrap value. Certification may not be an issue as, unlike the UK the EU has retained the pre 1998 exemption, although again you need to check locally whether and how they apply that rule.

 

[ashtead]

It would seem to be a UK boat which due to unfortunate events happens now to be in EU and is owned by a UK resident It would seem to me the OP is just returning the vessel to UK although maybe on a trailer as opposed to under own power . Is it any different to sailing back into UK if the mast and sails could be fixed?

 

[goeasy123]

I am in au unusual and undesirable position with a 1987 UK vat paid boat.
Having lost the mast and sails this summer my boat is stuck in the EU. My insurers have declared the boat a total loss and are paying out its full insured value. They have offered to sell the salvage back to me for a small amount, which I am considering accepting.
As I am effectively purchasing the boat from them in the EU would this purchase require the boat to be imported into the EU and the vat paid.
If that isnt required it might be to my advantage to pay the VAT to import the salvage into the EU if I only had to pay the EU vat on the salvage value.
What do you think

Join the CA and ask to speak to someone on the Regs and Tech team. They have sorted this issue out with HMRC.

 

[KevinV]

It would seem to be a UK boat which due to unfortunate events happens now to be in EU and is owned by a UK resident It would seem to me the OP is just returning the vessel to UK although maybe on a trailer as opposed to under own power . Is it any different to sailing back into UK if the mast and sails could be fixed?

I'm confused about this too - when I've "bought" a car back from the insurance there has been no actual change of ownership of the car at any stage, just a lower payout on the loss + retention of ownership of the vehicle. I don't understand why it would be any different with a boat.

 

[rogerthebodger]

I'm confused about this too - when I've "bought" a car back from the insurance there has been no actual change of ownership of the car at any stage, just a lower payout on the loss + retention of ownership of the vehicle. I don't understand why it would be any different with a boat.

I agree that no change of ownership in receiving a lower payout from the insurance as the boat is a part payment under the insurance agreement.

Now if the OP was not taking the boat as part payment the ownership of the boat would pass to the insurance.

he insurance would then have to remove the boat from the EU at their expense or if not removing the boat from the EU would be required to pay what the customs would determine the duties and VAT and to dispose of the wreck in an environmental manor again at the insurer's expense.

This happened in Australia when a boat founded and the crew evacuated of the boat and then the boat washed up an a beach and had to be removed and disposed of

As said it the OP wished to keep the boat in the EU it would have to be imported aaand any duties / VAT must be paid if applicable

The Boat can be on a temporary import for repair in most jurisdiction.

The RSA driving manufacture machine broke down and was sent back to Germany for repair and returned with no duty on import to Germany and reimport in to RSA

 

[goeasy123]

voyager35, With respect to UK, as you say your have an unusual position you should call the National Import Reliefs. Telephone: 0300 322 7065. Opening times: Monday to Friday: 8am to 4pm. I've found them very helpful.​

 

[voyager35]

Join the CA and ask to speak to someone on the Regs and Tech team. They have sorted this issue out with HMRC.

I am a member of the CA but unfortunately RATS is currently not giving advise. It seems that they are looking into there liability when giving advise

 

[voyager35]

Thank you for your input.
I dont think that i will have a problem bringing it back to the UK either before or after the repairs as I dont think that the insurance co will be buying the boat from me but paying me a sum of money as a settlment.
However as the boat is in the EU if I can get it imported at the salvage value then achieving duel VAT status can only be an advantage either for future cruising or when the boat is eventually sold.
I am flying out to Terceira on Sunday so will start to make some enquires when there

 

[dunedin]

Join the CA and ask to speak to someone on the Regs and Tech team. They have sorted this issue out with HMRC.

The CA is great, but as the OP says their specific case is very unusual, so doubt anybody has thought about this scenario let alone “sorted this issue out”. Plus if ”importing to EU” a boat already in the EU then HMRC has no role to play.

Presumably the solution may lie in terms of how any insurance settlement is handled. Surely the insurance company dont actually own the vessel to “sell“ back to the OP. If the OP accepts their offer of write off then perhaps the T&C would then mean the insurer takes ownership of the damaged vessel (though they may not want that - and would that become a VATable transaction for the insurer, even at a nominal value).
However, before then I would have thought the owner could negotiate to suggest a settlement say £1 less than their write off offer. The boat remains in the OPs hands so no transaction to trigger EU VAT or any certification issues?

PS. These are just the thoughts of a non expert so not to be relied upon.