VAT a thorn in buying

[Flyer295]

I have eventually found a boat that seems to suite my requirements.
HOWEVER, It is in Croatia at the moment and it is registered in the UK and flies the Red Ensign.

Does that mean that VAT has been paid at some time in the past? If so does it still maintain its VAT status without having to return to the UK?

I am a UK resident.

I know this is a minefield but if someone can explain in plain idiot' ese I be most grateful.

Bob (Flyer295)

 

[Irish Rover]

Where was it on B day 31/12/20

 

[Flyer295]

No idea, I am assuming it was not in the UK, I'm trying to find out.

If it is registered in the UK then surely it should have UK VAT paid at one time when it was first registered here

Bob

 

[KompetentKrew]

Doesn't matter - there's no relationship between VAT and registry.

Anyway, it could be VAT-paid for the previous owner, but UK VAT is no longer paid once you buy the boat - you are buying it outside the UK, so you have to pay VAT should you import it to the UK.

I would guess it's probably EU VAT paid. In which case it would keep that status if you buy it in the EU.

 

[Irish Rover]

No idea, I am assuming it was not in the UK, I'm trying to find out.

If it is registered in the UK then surely it should have UK VAT paid at one time when it was first registered here

Bob

Registration, flag don't determine VAT status. If it was outside UK on 31/12/20 then it won't have UK VAT paid status if you buy it.

 

[Flyer295]

Thank IR,
If VAT has been paid in the EU where do I stand. I do not want to bring it to the UK, well only for a visit, not to keep here.

B.

 

[AngusMcDoon]

Thank IR,
If VAT has been paid in the EU where do I stand. I do not want to bring it to the UK, well only for a visit, not to keep here.

B.

If it's VAT paid in the EU & you keep it in the EU you are fine. As a UK resident you can't bring it to the UK even for a day because UK VAT will become due.

 

[Flyer295]

If it's VAT paid in the EU & you keep it in the EU you are fine. As a UK resident you can't bring it to the UK even for a day because UK VAT will become due.

Surely that can't be right. Does that mean that no boat can visit the UK without paying VAT or is it because I'm British.

 

[Irish Rover]

Surely that can't be right. Does that mean that no boat can visit the UK without paying VAT or is it because I'm British.

Because of your residency not nationality.

 

[Flyer295]

Because of your residency not nationality.

What if I live aboard

 

[mrming]

What if I live aboard

You’re importing the boat if, as a UK resident, you own it, and you bring it to the UK. Doesn’t matter if you live on it. It’s the import that counts.

 

[westernman]

What if I live aboard

Depends in which country you are resident.

It is possible, but extremely difficult not to be resident anywhere. Being resident and paying tax somewhere, is usually acceptable proof that you are not resident somewhere else at the same time - but even then, extreme caution is required.

 

[AngusMcDoon]

What if I live aboard

If you want to buy a boat to live on in the UK and are a UK resident, don't buy it in Croatia.

 

[Flyer295]

So what you're saying is that I can't return to own country even for brief time eg. Attending a funeral etc

 

[Irish Rover]

What if I live aboard

If you live aboard in the UK you're a UK resident. If you live aboard anywhere else you become a non UK resident after a certain length of time.

 

[Irish Rover]

So what you're saying is that I can't return to own country even for brief time eg. Attending a funeral etc

Don't bring the boat to the funeral.

 

[Irish Rover]

If you continue to live primarily in the UK you can not bring the boat to GB without paying VAT. I think you might be able to bring it to NI but I'm not 100% sure about that.

 

[westernman]

So what you're saying is that I can't return to own country even for brief time eg. Attending a funeral etc

You can return to your own country. But if you are UK resident, you cannot bring the boat into the UK even for a day without paying VAT and getting it certified to UKCA.
UKCA is easy and just a paper exercise for a boat certified to RCD 2013/53/EU . Possibly seriously difficult for an old boat.

 

[KompetentKrew]

So what you're saying is that I can't return to own country even for brief time eg. Attending a funeral etc

I think you can because then you wouldn't be UK resident?

For most tax purposes, it is the statutory residence test that defines whether or not you're UK resident. The easy way to navigate the statutory residence test is to look at the Google Image results and follow one of the flowcharts there. If you're not resident by the statutory residence test then you're not resident for the purposes of income tax or capital gains tax - it is only the statutory residence test that matters (no saying "but I'm working from home for a UK company, I just happen to be in France" etc).

It is possible to be tax resident nowhere, but it is hard. If you're a true vagrant then it is easy to get stuck somewhere and accidentally fall into that country's tax regime because you stayed too many days in that country. Of course most vagrants keep their gobs shut and quietly leave as soon as they can.

 

[Tranona]

So what you're saying is that I can't return to own country even for brief time eg. Attending a funeral etc

VAT is a tax on transactions and bringing a boat into the UK is potentially a VAT able transaction. There are a number of exemptions but they are very specific. If you are non resident (irrespective of your citizenship) then you you can use the boat in the UK for up to 18 months under the temporary admission rules. This is not available to UK residents again irrespective of their citizenship you can, however possibly claim retuning resident relief if you are changing your residency to the UK.

As you are a UK resident if you buy the boat in Croatia you can use it freely anywhere within the EUbut you are limited in the amount of time you can use it there by the Schengen rules. so you have to decide if you can "live" with the constraints of the rules for you and the boat.