VAT on a boat bought in Channel Islands

[nimuemusic]

I am in the process of buying a 1989 yachts in Jersey. VAT has never been paid on it. I want to bring the yacht to mainland Europe (initially the Baltic). Can anyone offer any advice on VAT payment? When is it necessary and which is the best country/port in which to do it?

 

[AliM]

Tranona seems to know a lot about VAT - I'm sure he'll be along shortly.

I would think that you'll be liable to pay VAT in the first EU country that you stop at. If you are heading for the Baltic, then, and don't mind a long passage, it may be worth sailing straight to Germany (VAT @ 19%, at least, it was last year) rather than the UK. However, it's going to be easier to find out exactly what has to be done from the UK websites if the 1% is not too significant for you.

 

[Salty John]

You'll also need proof of RCD exemption, or approval.

 

[Tranona]

Yes, in theory the first EU state you enter. The difference in rate is usually very small, but Sweden is (I think) 25% whereas UK is 20%. Normally the tax would be based on your purchase price if you have just bought the boat, but that might be varied if you then spent a lot of money on it before entry. If coming into UK you should contact HMRC - there is useful information on the RYA site including contact details for HMRC. You will get a receipt from HMRC which is the only record of the payment so needs to be kept safely. Other states will accept it as evidence of payment if you are asked.

You should also ensure the boat is exempt from the RCD. If it was built in the EEA then you should be OK as such boats are exempt. If it was built outside the EEA then it will have to comply, which could turn out expensive and might make the deal no longer worthwhile. You can check beforehand either with the RYA or a specialist such as CE Proof. There is a useful article in this month's Yachting World on the subject - importing from the US in the example, but most of it is equally relevant to any import from outside the EU.

Perhaps useful to consider re-registering in the UK as a Channel Islands registered boat will likely attract more attention from officials, and in some countries (such as Greece) may limit the time you can cruise there.