VAT again

[macd]

Maybe an additional annual forum meetup in Cherbourg is required once we know what date we need our boats to be in the EU27.

You can comfortably assume you'll all be having a new year party, so take your thermals. HMG is in the process of amending the withdrawal bill to outlaw any extension to the transition period. Once passed this would make it 31.12.20.

 

[dune16]

Does the UK dealer have an office with a VAT registration in Euroland?
Where will it be registered?

No, they are only UK based however are French vat registered although this will not help me as if they charged me French vat directly the boat under the new means of transport rules would require the boat to stay in France for 3 months and 100 engine hours before going to spain otherwise it could still be seen as nmt by spain and therefore vat due again. Perhaps my move all depends on the withdrawal bill getting voted through and then we will be in transition until end of 2020 and just pay the UK vat....

 

[macd]

No, they are only UK based however are French vat registered although this will not help me as if they charged me French vat directly the boat under the new means of transport rules would require the boat to stay in France for 3 months and 100 engine hours before going to spain otherwise it could still be seen as nmt by spain and therefore vat due again. Perhaps my move all depends on the withdrawal bill getting voted through and then we will be in transition until end of 2020 and just pay the UK vat....

I daresay that you understand all this, dune, but for the benefit of others:

"new means of transport rules" does not mean that the rules are new. It refers to rules applying to new boats, new cars, new aircraft. All are still considered new until they have 'matured'. In the case of boats, this is 3 months of age/100 hours. (There's some ambiguity here: my understanding is that it's not 100 engine hours, but 100 hours at sea, for which most boats, of course, have no meter.) It also seems clearly to be the case that reaching either 3 months or 100 hours, not both, qualifies it as no longer new. (I brought a newish m/c from UK to Italy, so went through all this stuff. A Ducati, oddly enough, and you won't believe how much hassle it took for the manufacturer to confirm it was homologated for Italy...?)

If the boat, whilst still "new" moved to Spain, then that country could levy VAT. In that instance, the VAT originally paid would be reclaimed (either through the original vendor, or directly with the original VAT authority if the vendor won't play ball.) Exactly the same applies to road vehicles. There is absolutely no question of paying VAT twice under these circumstances. (An official EU Q&A on the subject states this emphatically.)

 

[Graham376]

Do we know definitely that any change in vat status will only apply at the end of the transition period and not January 31st? My new Dufour will be commissioned in France and moved immediately to Spain 1st week of March and I'd planned to get the UK selling dealer to provide a zero rated invoice and I was going to pay Spanish Vat so I could be sure it has EU vat paid status. This would be unnecessary if Jan 31st isn't a cut off day?

Maybe this mail received this morning from NIRU answers your question although it was an answer to something else.

I asked them specifically if Returned Goods Relief applied to private boats based at the moment in an EU State and whether the 3 year period can be extended.
I also asked whether the 3 years started from the date the boat left the UK or, whether it will start from the date we leave the EU.

This is their very short reply -

Good Morning,
Public notice Public notice 236 para 2.5 advises under what circumstance the 3 year time limit can be waived. In regard to your query post EU Exit, an extension remains in place until 31 January 2020. GOV.UK will be updated with any changes, so please check www.gov.uk/brexit for any updates.

Notice 236: Returned Goods Relief

 

[macd]

Thanks, Graham.
It's not quite the same as "the 3 year rule does not affect you as this is a commercial matter", but I daresay the practical effect is much the same, if a tad more bureaucratic.

 

[dune16]

Ok, so its looking like I may be ok to just pay UK vat which will be due in Feb 2020 and the boat will then retain its EU paid status when we come out of the transition period at the end of 2020. I understand the boat won't have UK vat paid status at that time but that isn't a concern as the boat is unlikely to visit uk waters and even then it could visit for up to 18 months before it has to return to the eu.

macd I have pm'd you, cheers

 

[JumbleDuck]

A 1995 boat should have paperwork showing its VAT status. If it doesn't, then I think it is probably worth approx 16.6% less than if it did have the paperwork.

As, of course, is any boat which cannot be definitively shown not to have spent a couple of years in Guernsey or Norway since being built ...

 

[macd]

Ok, so its looking like I may be ok to just pay UK vat which will be due in Feb 2020 and the boat will then retain its EU paid status when we come out of the transition period at the end of 2020. I understand the boat won't have UK vat paid status at that time but that isn't a concern as the boat is unlikely to visit uk waters and even then it could visit for up to 18 months before it has to return to the eu.

macd I have pm'd you, cheers

Thanks for the PM. I'll reply directly to it, but some response to your post (the part I've highlighted) perhaps warrants notice:
under current VAT rules , in order to be eligible for 18 months Temporary Importation, a boat cannot be owned by an EU resident. Note "resident", not national.

After Brexit, UK VAT rules (and many other laws/rules accumulated over the last 40-odd years) will remain much as they are now until such time as HMG gets around to changing them, which in some cases may be never. (European Union (Withdrawal) Act 2018.) In effect, they'll just substitute "UK" for "EU" in the text. In such a case, if you, as a UK resident, were to bring back your EU27 boat back to the UK, it may not be eligible for TI.

However, from what we've been told, the UK would deem your boat to be VAT- and duty-paid under Returned Goods Relief, so all would be well. But it would surely do no harm for you to contact NIRU to confirm this in writing. You don't indicate what the boat is, but since it's new the money involved isn't going to be trivial.

I think Graham is hoping for a fuller reply from NIRU than the one in post #44. If so, that might go further to allay your concerns.

 

[Graham376]

I think Graham is hoping for a fuller reply from NIRU than the one in post #44. If so, that might go further to allay your concerns.

I have mailed them again this morning to ask -

Unfortunately, there is still the unanswered question about the export date. As we are part of the Customs Union at the moment with free movement of VAT paid boats throughout the EU, has a UK boat having left UK waters been exported already or, does it become exported from the UK on the date we exit the EU?

 

[Graham376]

I have mailed them again this morning to ask -

Unfortunately, there is still the unanswered question about the export date. As we are part of the Customs Union at the moment with free movement of VAT paid boats throughout the EU, has a UK boat having left UK waters been exported already or, does it become exported from the UK on the date we exit the EU?

Now have an answer to the above question after an hour on the phone, being shuffled around various departments.

Their opinion is that a UK VAT paid boat owned by a UK resident which is in free movement within the EU and has not been imported into another State*, has not been exported from the UK. The date of export will be the date we leave the EU unless there is a deal which allows goods (vehicles) already in circulation to retain their status. Advice was also to watch the UK Gov publications in the New Year as new info becomes available.

* Not sure how this leaves folks whose boats have been matriculated (imported?) into Spain.

 

[dune16]

Now have an answer to the above question after an hour on the phone, being shuffled around various departments.

Their opinion is that a UK VAT paid boat owned by a UK resident which is in free movement within the EU and has not been imported into another State*, has not been exported from the UK. The date of export will be the date we leave the EU unless there is a deal which allows goods (vehicles) already in circulation to retain their status. Advice was also to watch the UK Gov publications in the New Year as new info becomes available.

* Not sure how this leaves folks whose boats have been matriculated (imported?) into Spain.

So date we leave the EU being Jan 31st or end of transition?

 

[Graham376]

So date we leave the EU being Jan 31st or end of transition?

End of transition.