VAT on possible temporary export

[Sticky Fingers]

Not if you become an EU resident due to the length of time you're there. EU residents don't get Temporary Import.

Ah I see, fair enough. OP not mentioned that as an intention.

 

[Tranona]

W.r.t. to the OP's situation there is a facility under HMRC rules to buy a new boat in the UK 'in bond' and export it immediately without VAT. It can then be consider non-union goods if and when it arrives in the EU27... and therefore use EU TI rules. As far as the EU is concerned it's a 3rd country boat and has made a customs declaration 'by simply crossing' the international waters limit of any EU country, as the Union Customs Code says.

This is the way the French west coast manufacturers do it.... The owner (usually with a delivery crew) takes ownership in La Rochelle and exports it immediately without VAT. They sail to Tanja where they pick up a document evidencing the boats presence by the customs authority in Morroco. It then sails to Spain, typically Ibizi where it presents this document and is issued with a Spanish Transit log citing the date, 18 months hence, by which the boat must have left the the EU. All this is arranged by an agent.

Through this mechanism there have been more than a few new cats arriving in Greece in recent years under owner/charter arrangements. A boat arrives in Greece. The onwer forms a Greek company, pays VAT and then claims it back as a business. At the end of the charter period the owner buys the boat of the company for a nominal fee and puts the boat under TI and a 3rd country flag. We have two friends that have done this and gone onto import their boats into the Channel Islands.

I know about that, but there is nothing to suggest in the OP that suggests he can use this. He clearly states he is going to pay UK VAT and keep the boat in Southampton. His question is whether he can take it to the EU on a temporary basis.

His question was answered in post#2, but of course later posts elaborated on the process and provided clarification before it all drifted away into irrelevant matters.

 

[DavidJ]

So any idea of staying in the EU with the boat over say a year or so would cost VAT on the boat..
This situation must be deterring many 1000's of UK people from longer stays in the EU as surely the matter of VAT liability is not confined to boats.

Yes it’s such a shame, we have returned after 20 plus years in the Med and now feel privileged that we were able to do it. It was the completion of a retirement dream for us. I think people will have to modify their dreams somewhat in the future.

 

[jfm]

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.

No, delivery would need to be outside EU. But it wasn’t the question.

 

[jfm]

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.

That’s a bit mixed up.
Starting with the boat in the EU wasn’t in the question. MRC knows his onions so I was answering the Q he asked.
There would not need to be VAT every time it returns to uk, so long as relief claimed/waiver applied for ( mention of 3yr edited out as per below).

 

[Sticky Fingers]

No, delivery would need to be outside EU. But it wasn’t the question.

Right, of course. so potentially outside Eu waters, offshore, but close to somewhere convenient. And yes, agreed classic thread drift I think

 

[dunedin]

That’s a bit mixed up.
Starting with the boat in the EU wasn’t in the question. MRC knows his onions so I was answering the Q he asked.
There would not need to be VAT every time it returns to uk, so long as the 3 yr time limit is respected.

Think we established way back there is no 3 year time limit for an owner to bring their boat back to the UK.
it only applies to an EU VAT status boat returning to the EU and seeking RGR.

 

[jfm]

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.

Oop yes correct - thanks tranona. Reference to 3 year rule in my posts should be ignored - apologies.

 

[jfm]

No.

Yes! But no vat is due for a temp import (18 mths limit)

 

[jfm]

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.

Yes but you wouldn’t be “returning” to uk in that scenario.

 

[Sticky Fingers]

Yes! But no vat is due for a temp import (18 mths limit)

I’d assumed that ‘a holiday’ was exactly that, a very temporary import, a few weeks or so.

 

[jfm]

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).

There is paperwork you can do at commencement of the 18 m this. I just did it 6 mths ago, for France. You can choose to ignore- your risk.

 

[jfm]

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

Initial delivery needs to be OUT of EU.

 

[jfm]

You will need to prove to the HMRC on entry that you haven’t exceeded the 18 months outside the UK. Now you can guess at what may satisfy the customs guy or for a few hundred quid you can have correct paperwork and fly through
Your choice.
I add
As time goes on knowledge will be gained on what is accepted by by HMRC (and what is not) and from that we will be in a better position to DIY but for the moment I think the formal process is all we safely have.

HMRC don’t care about the 18 month aspect David. No proof needed of that.

 

[jfm]

You do have a point and I bow to Tranona on these occasions
If your boat is in the EU for over 18 months you will have to pay EU VAT. You then loose your UK VAT (You can‘t have both although there are exceptions and I was one of them…another story) so effectively being outside the UK for 18 months looses your UK VAT.
I tentatively look around for support

Not correct! You don’t lose uk vat status merely because of the 18 month absence or thr payment of eu vat

 

[jfm]

The OP still hasn't answered about his residency status. Citizenship is irrelevant.

If he's an EU resident, or does something like take out a residence visa to allow him to stay for 18 months, then Temporary Import is not available and VAT becomes due.

OP is uk resident

 

[MRC]

As always - good reading.

 

[Hurricane]

Thanks to Tranona and JFM for steering this conversation.

 

[Laser310]

Can somebody explain why the OP is talking about "importing" his boat to the EU?

Why isn't he just visiting - subject to 18 months?

 

[jrudge]

It is the same thing different words. You are allowed temporary importation with nil paperwork ( other than that you maybe wise to keep to prove the 18 months ) for 18 months. Then you must leave ( for a few minutes is fine ) and then come back for another 18 months.