USA and VAT

[Davydine]

Is anyone else looking at the US dollar exchange rate and thinking that buying a boat in America and sailing it back to the UK could be a good option at the moment?

This leads on to a question.... I believe that VAT is only payable on boats built after a certain year can anyone confirm this?

David

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[roger]

The problem is not the VAT but the cost of making the boat comply with EU regulations when you get it home


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[Davydine]

The boat that I was looking at was a Westerly Conway built in 1979. Would that not comply with EU regs same as one that has not sailed accross the pond already?

Incidently VAT may have already been paid on this boat but I guess that if you cant prove it you will be stuck with paying it again, which leads to the question how do they value the boat.

David

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[Paragon]

Looked into it and established that regardless of age, you will be liable for VAT on entry to the EU. You will also be liable to import duty (about 1.7%) and VAT thereon as well.

Not sure about the CE stuff, wasn't told I'd need to do that.

HTH

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[jonjo]

I think VAT is also applied to the Shipping fee i.e. C&E apply tax on the sum off all the costs involved in getting the boat to the UK.

From what I have read on unofficial web sites RCD conformance will not apply to a Westerly of this age.

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[extravert]

USA and VAT, double VAT, more VAT, and then some

This has been discussed before here many times, do some searching. Mostly people seem to think it is not worth it after some investigation. You will have to pay VAT on the value of the boat and VAT on the shipping costs. You will also have to have the boat assessed for RCD compliance, which costs money for the assessment and for any remedial work required to meet the requirements. And guess what, you have to pay VAT on both those costs too. Age and country of build do not affect the application of these requirements. HMC&E also require you to pay VAT on what they consider the value of the boat is, which may be more than what you paid for it.

Boat prices generally seem to be cheaper in mainland Europe than in the UK. You may be better off getting a good deal on a boat from Holland or Germany. Transport is much cheaper, and RCD and VAT are much less of a problem.

<hr width=100% size=1>One day, I want to be a real sailor. In the mean time I'll just keep trying.

 

[PeteMcK]

Below are correct

I looked into this and you can take it in this case that VAT is payable "regardless of previous tax history of boat", import duty (I was told 1.5%), and these taxes are indeed due on the shipping charges as well if you decide to have it transported over. RCD should be ok for the Conway but check. Note that you pay the tax at the port of entry to the EU and at the local rate, so don't stop in Cork if you sail it back or you'll get clobbered at an even higher rate.

My project was maybe, just maybe, going to save 5 grand when I was being perfectly honest about the all up costs. Tempted though I was, I decided it definitely wasn't worth it, considering the all the imponderables, unless you look on it as a bit of a, hopefully, subsidised adventure (that's the bit that tempted me).

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[Davydine]

Re: USA and VAT, double VAT, more VAT, and then some

HHmmmm, I am beginning to think that it is going to be an awful lot of trouble to save at best a couple of thousand pounds, problem is when you look on ybw-boats.com and you see a Westerly Conway for about £27K it does make you think!

I will have a look on some of the Dutch websites. Does anyone know of any other than Botenbank.nl?

David

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[Dominic]

USA and US Sales Tax

Don´t forget you may also have to pay sales tax in the US - on a second hand boat.

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[jonjo]

Re: USA and VAT, double VAT, more VAT, and then some

What makes you think sales tax is due in the US?

I am 90% sure you are wrong about RCD applying to the middle aged re-imported Westerly discussed here.

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[dk]

Re: USA and VAT, double VAT, more VAT, and then some

If the boat was built and used in the EU before 16 June 1998 and you have proof (ie a mooring bill or similar) then she will be exempt from RCD compliance. Without this proof, or if the boat was built outside of the EU and hasn’t been plated, you will have to put her through the compliance process when you get her back to the UK, which can often turn out to be expensive.
But who the hell's going to know anyway - seen any CE inspectors roaming along your pontoon recently? (I didn't say that!)
Theoretical situation - what if you register her in the UK on the SSR, then just sail out of the US and turn up flying a red ensign into some insignificant UK port with millions of white plastic boats to get lost amongst? Only problem comes when you go abroad, but even then you don't need proof of VAT status if the boat was used in the UK before 16 June 1998. Not that I'm implying you do anything illegal of course - this is just an excercise!

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[qsiv]

Well, I'm buying from the US - the difference is it's a new build, and as I wont have to pay VAT (except on the shipping) or worry about RCD the case is much, much simpler! The saving is massive.

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[jonjo]

Re: USA and VAT, double VAT, more VAT, and then some

> then just sail out of the US and turn up

In the case of the yacht I am considering she would arrive on a cargo boat at Southampton. The question then becomes do Trading Standards team up with C&E to inspect newly arrived imported yachts?

C&E obviously have a direct interest in revenue but hopefully Trading Standards have better things to do.

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[davidhand]

If the boat was built in the EU prior to the new RCD rules you don't have to comply with the RCD thing. If the boat was built before 1985 there is no VAT to pay. If you are a UK citizen living abroad you can bring the boat into the country as part of you personal possesions VAT free, you have to have had it for at least six monhs and you can't sell it for one year I believe. You may have to pay US State Sales tax, but not all states have sales tax, also you may not have to pay sales tax if you export it right away. The best boats to buy are things like Moody and Westerly, these have not been agressively marketed in the US and sell used well below their UK price. I checked into this years ago, but check again as things change, UK Customs have a booklet "Sailing your pleasure craft to and from the U.K." also the RYA can give good information. The above is what I remember from my own enquiry a couple of years ago. One other thing I discovered is that if VAT was paid by a previous owner and then the boat was taken out of the EU and sold VAT has to be paid again on reimportation.
Good luck.

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[Bergman]

I've been considering something similar and have read several threads like this one, its a popular subject.

One feature is common to all the threads and that is numerous contradictory statements all made with absolute confidence of their validity.

Clearly no-one knows the absolute facts, and that probably include HMC&E. Certainly I have asked them twice and received two different answers!

I would love someone to make a simple clear and factual statement of what the situation really is. Preferably this should be a lawyer and the statement published in an authorative journal - so we could sue if they got it wrong.

I can't help feeling that it will become a bit like the modern approach to car ownership - buy the thing don't tax or insure or MOT and just drive it. The case was made in an earlier posting, bring it home, stick a red ensign on the back and "say nowt" - I doubt anyone will bother. May be problem if you want to sell it but perhaps then you insure it and have a slight accident.

All very illegal and I could'nt possibly suggest such a thing, but the lunatics who think up these nonsensical regulations drive you think like that.





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[dk]

Re: USA and VAT, double VAT, more VAT, and then some

Forget it. If she arrives by cargo ship she will definitely be subject to the full force of UK/EU bureaucracy!

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[andyball]

Re: USA and VAT, double VAT, more VAT, and then some

Our recent purchase came by road from Holland to UK & wasn't even checked inside for illegal immigrants, never mind proof of vat/rcd etc.

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[Sailfree]

Re: USA and VAT, double VAT, more VAT, and then some

How many illegal immigrants could you get inside & whats the going rate? Now thats what I call VAT!

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[extravert]

Re: USA and VAT, double VAT, more VAT, and then some

The real problem arises when you want to sell the boat again. If you do not have a paper trail with evidence of VAT status then a broker will have to sell the boat as VAT unpaid. That's a big chunk to take off the selling price. Because of my past ignorance I've been through this, and it really ruins your day to find out 20% of the value of your boat has disappeared without trace.

I know there are going to be plenty of people saying 'I've bought and sold used boats all my life and never been bothered with VAT, RCD etc...'. That may be the case, but I reckon that broker, customs, and us lot are all getting more aware of VAT on boats and compliance with the RCD. It might still be possible to do a 'grey sale' now, but less likely in the future, even with private sales.

<hr width=100% size=1>One day, I want to be a real sailor. In the mean time I'll just keep trying.

 

[extravert]

Re: USA and VAT, double VAT, more VAT, and then some

> What makes you think sales tax is due in the US?

Er, I don't. Someone else said that, not me.

> I am 90% sure you are wrong about RCD applying to the middle aged re-imported Westerly discussed here.

I had not read the post saying what the boat was carefully enough when I replied. I was commenting more on VAT than RCD. You are right for an 1979 UK built boat. This is the relevant wording...


Boats that will not need to comply with the Directive include:-

Boats built in the EEA prior to 16 June 1998 even if exported and subsequently re-imported after 16 June 1998.



<hr width=100% size=1>One day, I want to be a real sailor. In the mean time I'll just keep trying.