VAT on possible temporary export

[MRC]

We currently have a new boat in build for delivery May ish.

I will be buying the boat on final invoice in my own personal name and paying the UK VAT.

It will be UK based but in an ideal world I would like to use the boat in the UK for 18 months, take to the Med for 18months and then return to the UK.

Are there any temporary export rules that would allow this or is the boat destined to stay in Southampton during our ownership

TIA

 

[Sticky Fingers]

That’s fine. It can stay in the EU for 18 months, then it has to leave the EU, this can be for as little as a few hours if you wish. Eg sea trip from Italy -Tunisia or Spain - Morocco . Then refuel, come back in to EU. Or you can truck it home to the UK.

 

[DavidJ]

When you export it make sure you have the right paperwork for when you reimport. I used Peters and May for the paperwork when reimporting my boat a few months ago. All went smoothly. Nice people especially Zissy who was a great help.

 

[jfm]

Hi MRC - been a long time!

Yup I agree the above. Assuming you are yourself not resident in EU, then you may take the boat into the EU VAT free under "TI". You will only pay VAT if you fail subsequently to exit the boat from EU within 18 months. No charter use in EU. You will need some paperwork to do TI and I'd recommend PSP (Brian) who did it for me recently very efficiently via a French subcontractor - there's a fee of course but well worth it. Importing into France is somewhat easier than Spain, imho, paperwork wise. As said above you must exit EU within 18 months else VAT becomes due (though you can extend that 18mths by "winter warehousing" the boat - will only go into that if relevant to you).

Doesn't sound like it will be a problem but to re-import to UK after the Med period you must reimport to UK within 3 yrs of the original export from UK, otherwise you're risking UK VAT for a second time.

 

[jrudge]

surely rather than pay the vat take it to the eu first and then see if you want it in the uk or not. You then also have the benefit of importing a second hand boat which will be lower value for vat purposes.

 

[Sticky Fingers]

That’s an idea. Would that mean that delivery from new would have to be in the EU? Assume this comes with additional paperwork / headaches but could be a significant saving.

 

[Hurricane]

surely rather than pay the vat take it to the eu first and then see if you want it in the uk or not. You then also have the benefit of importing a second hand boat which will be lower value for vat purposes.

I thought that.
And TI would work whilst in the EU for 18 months
After the 18 months, I assume that if you brought it back to the UK it would immediately attract VAT
But subsequent 18 month trips to the EU would be free of VAT
Now, wouldn't it be nice to have it back in the UK without having to pay VAT.
There was a rumour that every time you bring a boat back to the UK, it would attract VAT.

Maybe JFM could comment because this is an obvious scenario for lots of people.

 

[simon]

Hi MRC - been a long time!

Yup I agree the above. Assuming you are yourself not resident in EU, then you may take the boat into the EU VAT free under "TI". You will only pay VAT if you fail subsequently to exit the boat from EU within 18 months. No charter use in EU. You will need some paperwork to do TI and I'd recommend PSP (Brian) who did it for me recently very efficiently via a French subcontractor - there's a fee of course but well worth it. Importing into France is somewhat easier than Spain, imho, paperwork wise. As said above you must exit EU within 18 months else VAT becomes due (though you can extend that 18mths by "winter warehousing" the boat - will only go into that if relevant to you).

Doesn't sound like it will be a problem but to re-import to UK after the Med period you must reimport to UK within 3 yrs of the original export from UK, otherwise you're risking UK VAT for a second time.

Who are PSP? I have a new boat in Italy that I need to export from the EU by early next year and then bring back in. Can they handle the paperwork and advise on this? I’m thinkinking of going to Tunisia to do this.

 

[Tranona]

Doesn't sound like it will be a problem but to re-import to UK after the Med period you must reimport to UK within 3 yrs of the original export from UK, otherwise you're risking UK VAT for a second time.

The 3 year limit no longer applies following a lot of campaigning by the RYA and CA mainly to cater for those people who own boats that have been in the old EU for a long time but still want to bring them back to the UK. The condition about being in the same ownership still applies.

 

[Tranona]

surely rather than pay the vat take it to the eu first and then see if you want it in the uk or not. You then also have the benefit of importing a second hand boat which will be lower value for vat purposes.

Why would one want to do that and pay VAT twice? If you want to keep a boat in the EU permanently that is fine - pay the VAT in the EU, but if your intention is like the OP is to return to the UK then pay the VAT here and use thee temporary importation facility.

 

[Momac]

So let's say a UK citizen takes his UK VAT paid boat to the EU for a holiday . Is that considered to be an import?

 

[Sticky Fingers]

So let's say a UK citizen takes his UK VAT paid boat to the EU for a holiday . Is that considered to be an import?

No.

 

[simon]

Why would one want to do that and pay VAT twice? If you want to keep a boat in the EU permanently that is fine - pay the VAT in the EU, but if your intention is like the OP is to return to the UK then pay the VAT here and use thee temporary importation facility.

You dont need to pay VAT in the EU. As long as you take it out the EU before 18 months and return as temporary import you need not pay VAT. If you then return to UK you will pay VAT but on a much reduced value.

 

[DavidJ]

The 3 year limit no longer applies following a lot of campaigning by the RYA and CA mainly to cater for those people who own boats that have been in the old EU for a long time but still want to bring them back to the UK. The condition about being in the same ownership still applies.

Yep
Exactly my case. I bought new in the UK and took my boat to the EU twenty years ago. In September 2023 I had it trailered back to the UK with no VAT problems as above. My only worry was there was an implication that you should have had the boat in the UK for some time??? before exporting and not immediately export it after purchase but this didn’t transpire to be a problem.

ref CA announcement
“As long as an owner can demonstrate that the boat has been located in the UK at some point in their ownership,”

 

[st599]

So let's say a UK citizen takes his UK VAT paid boat to the EU for a holiday . Is that considered to be an import?

Depends on where he's a resident.

 

[Momac]

No.

Good

So it's not necessary to do anything until the 18 months deadline approaches .
I am curious to understand how anyone would know a boat has been in the EU longer than 18 months (assuming the boat is moved regularly and not based at one location the whole time).

 

[Tranona]

You dont need to pay VAT in the EU. As long as you take it out the EU before 18 months and return as temporary import you need not pay VAT. If you then return to UK you will pay VAT but on a much reduced value.

I know that - I was responding to a post that was confusing and maybe misunderstood what it was saying.

 

[Tranona]

Good

So it's not necessary to do anything until the 18 months deadline approaches .
I am curious to understand how anyone would know a boat has been in the EU longer than 18 months (assuming the boat is moved regularly and not based at one location the whole time).

That is a risk you take. In general though EU states are much more proactive in monitoring the movement of boats than in the UK. However given that there are powers to impound your boat, levy fines, charge VAT and give you a hard time it is perhaps prudent to follow the rules.

 

[jrudge]

Why would one want to do that and pay VAT twice? If you want to keep a boat in the EU permanently that is fine - pay the VAT in the EU, but if your intention is like the OP is to return to the UK then pay the VAT here and use thee temporary importation facility.

There is no payment twice.

Assuming he is a U.K. residence he takes delivery into the eu.

No tax

Take it out every 18 months.

If he decided to bring to the U.K. ( why would you ) you pay vat on the second hand value. Why would you keep a boat in the U.K. and pay vat ?! Makes no sense to me

 

[Hurricane]

There is no payment twice.

Assuming he is a U.K. residence he takes delivery into the eu.

No tax

Take it out every 18 months.

If he decided to bring to the U.K. ( why would you ) you pay vat on the second hand value. Why would you keep a boat in the U.K. and pay vat ?! Makes no sense to me

I'm with you on this.
I even have a friend who bought a new boat here in the UK and had it delivered outside of the UK thus saving UK VAT.
He is now sailing back and forth from to the EU (Eastern Med).
So far he has had the boat for 3 years and not paid any VAT

If the OP then decided not to bring the boat back to the UK after those first 18 months, could he reset the EU 18 months in the Channel Islands?
Maybe do this for 3 years and the boat will be depreciated even further.