VAT / non UK nationality

[dolphin12]

Good afternoon.
We would like to ask for advice on VAT for our boat after new year.
We are a couple who have lived and worked in the UK for many years, our nationality is the EU. We own a sailboat that was built in 1972 - she is registered under the English flag - VAT paid.
Please advise that we would like to take a cruise to the south - Mediterranean in the coming years and then return to the UK. We don't know, if we will have to pay VAT on our sailboat in the EU.
Does this also apply to older ships?
Do you think it is more convenient for us to sail to France before the end of the year?
Do you know, if we sail to France before new year and boat will be EU VAT paid, can we temporary import it back to UK?
If anyone knows the answer, we would be grateful for advice.
Thank you.

 

[john_morris_uk]

I’ve just approved this new post so I hope they’re genuine question(s) asked in good faith.
Perhaps others can give answers but:
There’s no such thing as ‘nationality EU’
There’s no such thing as registered under the English Flag.

A boat can be registered in the UK by a British owner....

As to ‘Do they sail to France...’. I’ve no idea.

PS If this degenerates into a Brexit squabble the thread is likely to get moved by Forum Admin!

 

[Irish Rover]

Good afternoon.
We would like to ask for advice on VAT for our boat after new year.
We are a couple who have lived and worked in the UK for many years, our nationality is the EU. We own a sailboat that was built in 1972 - she is registered under the English flag - VAT paid.
Please advise that we would like to take a cruise to the south - Mediterranean in the coming years and then return to the UK. We don't know, if we will have to pay VAT on our sailboat in the EU.
Does this also apply to older ships?
Do you think it is more convenient for us to sail to France before the end of the year?
Do you know, if we sail to France before new year and boat will be EU VAT paid, can we temporary import it back to UK?
If anyone knows the answer, we would be grateful for advice.
Thank you.

As I understand it you are EU citizens and you are resident in the UK. That being so, you will have no difficulty doing what you want to do - spend some time cruising in the EU and then return with your boat to the UK. Specifically you will be able to take your boat to the EU under Temporary Admission [TA ]and stay for up to 18 months and you will be able to bring your boat back to the UK under Returned Goods Relief [RGR] arrangements. Plenty of threads already on TA and RGR so I won't clog up the post with details.
One thing to be careful about. As EU citizens you won't be technically subject to the 90/180 rule but in reality you will still be restricted as you would become EU residents if you stay more than 183 days in any one year and VAT would then be payable.
I've ignored the age of your boat as I'm not really up to speed on how that might affect your liability for/exemption from VAT in either the UK or EU.
The 18 months TA period could be extended without leaving the EU if your boat is in bond/out of use for periods of time.

 

[dolphin12]

As I understand it you are EU citizens and you are resident in the UK. That being so, you will have no difficulty doing what you want to do - spend some time cruising in the EU and then return with your boat to the UK. Specifically you will be able to take your boat to the EU under Temporary Admission [TA ]and stay for up to 18 months and you will be able to bring your boat back to the UK under Returned Goods Relief [RGR] arrangements. Plenty of threads already on TA and RGR so I won't clog up the post with details.
One thing to be careful about. As EU citizens you won't be technically subject to the 90/180 rule but in reality you will still be restricted as you would become EU residents if you stay more than 183 days in any one year and VAT would then be payable.
I've ignored the age of your boat as I'm not really up to speed on how that might affect your liability for/exemption from VAT in either the UK or EU.
The 18 months TA period could be extended without leaving the EU if your boat is in bond/out of use for periods of time.

Thank you for answer. I read somewhere that as a passport holder from one of the EU countries, I cannot sail in the EU on a boat that is not VAT paid in the EU and I have to import it permanently, not temporarily.

 

[dolphin12]

I’ve just approved this new post so I hope they’re genuine question(s) asked in good faith.
Perhaps others can give answers but:
There’s no such thing as ‘nationality EU’
There’s no such thing as registered under the English Flag.

A boat can be registered in the UK by a British owner....

As to ‘Do they sail to France...’. I’ve no idea.

PS If this degenerates into a Brexit squabble the thread is likely to get moved by Forum Admin!

You are not right, a ship in the UK can also register a non-British resident .

 

[syvictoria]

This has been posted elsewhere, but may also be helpful:

Brexit - what happens next? | Current Affairs | Knowledge & Advice | RYA - Royal Yachting Association

 

[Irish Rover]

Thank you for answer. I read somewhere that as a passport holder from one of the EU countries, I cannot sail in the EU on a boat that is not VAT paid in the EU and I have to import it permanently, not temporarily.

Not so. I'm an Irish citizen resident in Turkey and my boat is NOT EU VAT paid. I regularly avail of TA in Greece with no issues. Citizenship is not a factor for TA - only residency matters.

 

[dolphin12]

Not so. I'm an Irish citizen resident in Turkey and my boat is NOT EU VAT paid. I regularly avail of TA in Greece with no issues. Citizenship is not a factor for TA - only residency matters.

Thank you. I found it from the previous link. That means we will have the best of both worlds. We will have to temporarily import for 18 months / British resident \, but we can stay there for the whole 18 months / EU passport \. That's great. Thank you.

 

[Irish Rover]

Thank you. I found it from the previous link. That means we will have the best of both worlds. We will have to temporarily import for 18 months / British resident \, but we can stay there for the whole 18 months / EU passport \. That's great. Thank you.

Be careful. As I said earlier if you stay for more than 183 days in any one year you then become an EU resident and are liable to pay VAT.

 

[De.windhoos]

You don't have an issue because your boat is old enough to be VAT exempt

 

[dunedin]

You don't have an issue because your boat is old enough to be VAT exempt

I believe that is a fallacy and not true. Older yachts that have evidence of being in EU waters at a certain date (can’t remember when, 1980’s or so, but easily looked up) were deemed to be VAT paid, without having to pay any tax.

But that VAT paid status can be lost, just like any other boat, in which case VAT on current market value would be payable for importing, just like on a newer boat.

 

[De.windhoos]

I believe that is a fallacy and not true. Older yachts that have evidence of being in EU waters at a certain date (can’t remember when, 1980’s or so, but easily looked up) were deemed to be VAT paid, without having to pay any tax.

But that VAT paid status can be lost, just like any other boat, in which case VAT on current market value would be payable for importing, just like on a newer boat.

oh wauw. that's a bit harsh . The rule is that boats build before 1985 are deemed VAT paid, so essentially VAT excempt.
Given the fact that this boat was build in '72. No customs officer in the EU or the UK is going to check VAT status, except maybe if it's a J-Class....

 

[Tony Cross]

Thank you for answer. I read somewhere that as a passport holder from one of the EU countries, I cannot sail in the EU on a boat that is not VAT paid in the EU and I have to import it permanently, not temporarily.

You'll need to carry proof that you're a UK resident. Proof of income tax paid in the UK should do I would think.

EU residents are not allowed to use a non-VAT paid boat in the EU, but you're not an EU resident (or you won't be next year). It's residency that matters here.

 

[Baggywrinkle]

Be careful. As I said earlier if you stay for more than 183 days in any one year you then become an EU resident and are liable to pay VAT.

AFAIK there is no such thing as EU residency, or EU citizenship - residency has to be in a member country of the EU - perhaps their country of citizenship?

If they cruise form the UK to France then Spain, Portugal, Spain, France, Italy, Croatia, Greece and back again, not spending more than a couple of months in each country, they can't qualify for residency in any of the countries they visit because they are not there long enough - so can't get residency in the EU.

I guess they might lose UK residency if out of the UK for too long - in which case do they revert to a citizen of their original EU country exercising FoM in Europe with no fixed abode? ... maybe this makes them liable for VAT?

The only sensible answer seems to be they are out of the UK for too long, UK residency is revoked, and then the default residency is in the country where they are a citizen regardless of how long they stay there? ... but then what happens to people with dual citizenship? I'm confused.

 

[nortada]

AFAIK there is no such thing as EU residency, or EU citizenship - residency has to be in a member country of the EU - perhaps their country of citizenship?

If they cruise form the UK to France then Spain, Portugal, Spain, France, Italy, Croatia, Greece and back again, not spending more than a couple of months in each country, they can't qualify for residency in any of the countries they visit because they are not there long enough - so can't get residency in the EU.

I guess they might lose UK residency if out of the UK for too long - in which case do they revert to a citizen of their original EU country exercising FoM in Europe with no fixed abode? ... maybe this makes them liable for VAT?

The only sensible answer seems to be they are out of the UK for too long, UK residency is revoked, and then the default residency is in the country where they are a citizen regardless of how long they stay there? ... but then what happens to people with dual citizenship? I'm confused.

Good answer.

Confused, so am I.

There appears to be a growing trend in LL to list a set of ‘personal’ circumstances and then ask specific questions. In the fluid situation we are currently in, the honest answer is often, don’t know. There then follows an increasingly hypothetical debate but the final answer is still, don’t know.

The only real answer, is to take all/any precautions to ride out the coming storm, when practical answers will emerge but I anticipate they will vary from country to country and official to official.

It’s called the uncertainties of life.

 

[RupertW]

Good answer.

Confused, so am I.

There appears to be a growing trend in LL to list a set of ‘personal’ circumstances and then ask specific questions. In the fluid situation we are currently in, the honest answer is often, don’t know. There then follows an increasingly hypothetical debate but the final answer is still, don’t know.

The only real answer, is to take all/any precautions to ride out the coming storm, when practical answers will emerge but I anticipate they will vary from country to country and official to official.

It’s called the uncertainties of life.

I’ve never bought the “we don’t know” argument - the rules have been in place for decades for EU countries, and decades for third countries and we are simply moving from one to the other unless special deals are made. All the rules can be looked up. And one part of that is clear both from rules and from practice that somebody on an extended cruise from their normal place of residence remains a resident in their normal place until they spend 183 days or more in one other country. Their citizenship never allows them to become resident in a place where they are not. I found this out as an Irish citizen when I wondered if I could get Irish residency without going there - impossible.

 

[Rappey]

My friend is in a similar situation as has lived here most his life, has a uk registered bought that was bought new and paid for in germany.
He also wants to sail to the med in 2021.
Found this on uk.gov

If away from the UK for more than 2 years you may still qualify to return to live in the UK under your previous conditions if, for example, you have strong family ties in the UK or have lived here most of your life. However, as this would be a matter for the Immigration authorities, you would be required to address any further queries to them.

You need a Returning Resident visa to come back to live in the UK if you were previously settled (given ‘indefinite leave to remain’) and you’ve been away for more than 2 years.

 

[dolphin12]

My friend is in a similar situation as has lived here most his life, has a uk registered bought that was bought new and paid for in germany.
He also wants to sail to the med in 2021.
Found this on uk.gov

If away from the UK for more than 2 years you may still qualify to return to live in the UK under your previous conditions if, for example, you have strong family ties in the UK or have lived here most of your life. However, as this would be a matter for the Immigration authorities, you would be required to address any further queries to them.

You need a Returning Resident visa to come back to live in the UK if you were previously settled (given ‘indefinite leave to remain’) and you’ve been away for more than 2 years.

I'm pretty sure I can leave for a maximum of 5 years without losing Settled status .

 

[syvictoria]

I'm pretty sure I can leave for a maximum of 5 years without losing Settled status .

From Apply to the EU Settlement Scheme (settled and pre-settled status)

If you want to spend time outside the UK

If you have settled status, you can spend up to 5 years in a row outside the UK without losing your status.

If you’re a Swiss citizen, you and your family members can spend up to 4 years in a row outside the UK without losing your settled status.

If you have pre-settled status, you can spend up to 2 years in a row outside the UK without losing your status. You will need to maintain your continuous residence if you want to qualify for settled status.

 

[Tony Cross]

AFAIK there is no such thing as EU residency, or EU citizenship - residency has to be in a member country of the EU - perhaps their country of citizenship?

If they cruise form the UK to France then Spain, Portugal, Spain, France, Italy, Croatia, Greece and back again, not spending more than a couple of months in each country, they can't qualify for residency in any of the countries they visit because they are not there long enough - so can't get residency in the EU.

I guess they might lose UK residency if out of the UK for too long - in which case do they revert to a citizen of their original EU country exercising FoM in Europe with no fixed abode? ... maybe this makes them liable for VAT?

The only sensible answer seems to be they are out of the UK for too long, UK residency is revoked, and then the default residency is in the country where they are a citizen regardless of how long they stay there? ... but then what happens to people with dual citizenship? I'm confused.

I think that the issue of your residency is a bit like Schrodinger's Cat - you can claim to be resident in several countries at the same time but it's only when you have to prove your residence status that your real residence status becomes apparent.

For example, suppose you're a UK citizen who permanently moves to Greece and obtains legal residence status there. Clearly one can be out of the UK for some time and retain residence there, equally one can be out of Greece for some time and retain residence there too, so one appears to be resident in both countries. Now suppose the Greek tax authorities decide to investigate your tax affairs and claim that because you're a legal Greek resident you should be paying Greek taxes (Greece taxes worldwide income). You know that Greece has a double taxation agreement with the UK so you claim that since you're also a UK resident you pay tax there and not in Greece. The Greek tax authority will require you to prove your UK residence status (and this where we find out whether Schrodinger's cat is alive or dead). To do that HMRC will require you to prove that you were living in the UK for at least 183 days in every year you are claiming to have been resident in the UK. Clearly you can't be resident for more than 183 days in any year in both the UK and Greece, so it's at this point that your actual residence status becomes apparent and fixed.