Vat or no Vat

[rangersteve]

Hi All please can some one please give me a definative answer
I have just bought a 1966 Dell Quay Ranger to restore from Guernsey it has always been a guernsey boat.
I have been invioced to pay the VAT by the haulier importing the boat but i have been told the boat is pre VAT and therfore it does not have to be paid
can someone please shed some light
Steve

 

[MapisM]

Can't tell for sure if/how Guernsey might be an exception, but I'm afraid that the general rule is that upon import TODAY of a boat from outside the EC, not only you should pay the VAT, but the vessel should also be CE certified (regardless of how old she is).
Oh, and welcome!

 

[Bandit]

I you can clearly demonstrate it was in UK before VAT started as it was built in UK and probably was used in France pre VAT days so therefore VAT should not be charged.

PS whats the boats name?

 

[jfm]

Can't tell for sure if/how Guernsey might be an exception, but I'm afraid that the general rule is that upon import TODAY of a boat from outside the EC, not only you should pay the VAT, but the vessel should also be CE certified (regardless of how old she is).
Oh, and welcome!

That's exactly right.

If the vessel had been physically in the UK or elsewhere in EU

(i) when VAT started (1973 iirc) or
(ii) at the time for "deemed vat paid" treatment which is 31.12.1992,

then there might be no UK VAT on import. I say "might" becuase there are other conditions too, but there is no point listing them here becuase your boat has been outside UK since 1960-something

Therefore you do generally have to pay VAT now on import of the boat to UK, at 20% of the CIF value of the boat

HOWEVER - there are lots of reliefs, including a temporary import relief if the vessel is coming to UK to have work done on it. If the restoration work is being done in UK but the boat will then leave UK you might qualify for this. you have to apply to HMRC for this relief.

The devil is in the detial and your post doesn't contain enough detail but it feels like the haulier is correct

 

[Tranona]

Hi All please can some one please give me a definative answer
I have just bought a 1966 Dell Quay Ranger to restore from Guernsey it has always been a guernsey boat.
I have been invioced to pay the VAT by the haulier importing the boat but i have been told the boat is pre VAT and therfore it does not have to be paid
can someone please shed some light
Steve

Suggest you read HMRC VAT Notice No8 which gives the rules on VAT on imported boats. There is also a useful summary on the RYA website with a FAQ section written jointly by the RYA and HMRC.

The bottom line is that if you intend keeping the boat in the UK/EU you have to pay VAT - unless as jfm says you can meet one of the very limited number of exemptions.

 

[Questor]

Hi All please can some one please give me a definative answer
I have just bought a 1966 Dell Quay Ranger to restore from Guernsey

Very envious indeed. My all time favourite boat. Regardless of whether you've got to pay the Vat or not,(which surely can't be that much???) enjoy her and good luck with the restoration work, and let's see some pics.

I was sorely tempted by a fully restored one a short while back, but unfortunately it wasn't to be.

D Q R porn attached.

 

[Jim@sea]

I was in the same position as you a number of years ago. To reply to this question I have to overelaborate as its the trivial details which are important. I bought a boat in Alderney. My boat was made in Finland and imported to the UK "BEFORE VAT was introduced. It was then sold to a UK resident as a new boat in March 1973. Aparrently more boats were sold in March 1973 than any other March since as VAT was introduced in April 1973. So in fact March 1973 was not "VAT Evasion" which is illegal, and was not even "Vat Avoidence" and any boat sold then or even going back to your boat 1966 was not even "outside the scope" as up to April 1973 VAT did not exist.
Anyway my boat after spending 2 years in the UK was sold 1975 as a second hand boat by a UK boat dealer (with no VAT obviously being second hand) and went to Alderney. Where I bought it 10 years later.
I brought it back to the UK. I lived in Manchester. For some strange reason the VAT authorities sent a VAT Inspector all the way from Brighton Marina to ask me about the VAT status of my boat (and presumably charge me. ie Boat £20K VAT @ 15% =£3000 ?)
Anyway because the boat had been used privatly in the UK before it went to Alderney I did not have to pay anything.
I since believe that an important point is that it should not matter whether how long your boat has been in Geurnsey, the point is that it was a UK boat "before" it went to the Channel Islands and you are only bringing it back.
However I would ask the VAT Authorities for a specific reply before you return the boat to the UK or without supporting documentation they may charge you VAT.
Its their rules.

 

[Tranona]

From the OPs description the boat was never sold in the UK. It is irrelevant if a boat has had VAT paid on it in the past. If it leaves the EU it is subject to VAT on its return - except if it is brought back in by the person who originally took it out, and then there are limitations. The rules are quite clear on that. It is also irrelevant if the boat is pre 1973 - VAT is not a tax on boats but on transactions (known as chargeable events) and importing a boat into the EU is a chargeable event.

 

[MapisM]

From the OPs description the boat was never sold in the UK.
...
importing a boat into the EU is a chargeable event.

Precisely what I meant with my reply above.

 

[Tranona]

Precisely what I meant with my reply above.

Exactly - I was responding to Jim@sea who was suggesting that if VAT had been paid previously then it was not payable again if the boat was re-imported. Just trying to add a bit more explanation.

 

[Jim@sea]

Exactly - I was responding to Jim@sea who was suggesting that if VAT had been paid previously then it was not payable again if the boat was re-imported. Just trying to add a bit more explanation.

Sorry I was trying to say that when the 1966 boat was sold new in the UK VAT could not have been charged on it as VAT did not exist. Thus the boat should be exempt from VAT if it was brought back to the UK.
I would also consider having the 1966 boat valued by 2 Guernsey boatyards and use the valuation £5000? as the basis that if you have to pay UK Vat then the VAT computation is based on a proffessional "Arms length" valuation.
When I bought my boat in Alderney I took it to Guernsey and asked a boatyard to value it and their valuation was 30% less than I paid for it.
When I worked for an Auction Group as a valuer I was told on some occasions to give a "Fire Sale" valuation. Perhaps this is the sort of valuation you need.

 

[Tranona]

Sorry I was trying to say that when the 1966 boat was sold new in the UK VAT could not have been charged on it as VAT did not exist. Thus the boat should be exempt from VAT if it was brought back to the UK.

Pretty sure you are not correct. Liability for VAT is determined by the nature of the transaction and importing a boat into the EU is normally a chargeable event - irrespective of the age of the boat or whether it was originally sold in UK. To be considered "exempt" the boat must have been in the EU in 1992 - rules are very clear on that - and even then if it was subsequently exported and re-imported it would be subject to VAT unless it was covered by the temporary exportation/reimportation rules or the importer was taking up residence and the boat qualified as a chattel.

 

[rangersteve]

Thanks

Hi Ya All
Thanks for all the replies it was much appreciated
My new toy Tresyla is now here and will be coccooned in her winter scaffold soon so all the exspensive stuff can take place
For those of you who are interested i will be posting a few pics along the way regards
Steve

 

[Spi D]

..if VAT had been paid previously then it was not payable again if the boat was re-imported.

And this is because it would have qualified for a VAT return on the export from the EU. Therefore, carrying the status of 'non-VAT'ed' while out, it would have to be VAT'ed on the re-import.
And ofcourse the VAT should be calculated on the value on each occasion.

Being born wihtin the EU does not mean it was initially VAT'ed within the EU as it may have been exported directly, to be VAT'ed in the destination country.

Virtually all recreational craft built since 16 June 1998 and intended for sport and leisure use, may only be placed on the EEA market or put into service within the EEA if they meet the essential safety requirements set out in the Recreational Craft Directive – 2003/44/EC. These regulations apply to all recreational craft between 2.5 and 24 metres in hull length whatever the means of propulsion. They may be fully built or partly completed; constructed within, or imported from without the EEA. The builder, importer or owner, or the person putting the craft into EEA service, (the responsible person) has a legal obligation to ensure that the craft meets the relevant requirements and to carry out the appropriate CE marking.

Each and every boat needs to be CE marked as proof of compliance with the Recreational Craft Directive. Referring to the type being certified is not enough.

For imports the same date applies: If imported (marketed) to the EU later than 16. July 1998 - regardles of age, it must comply.
To support this, many insurance companies will not cover boats lacking the certificate.
There is an exemption for self-made boats if sold later than 5 years from date of production.


A bit funny though, that for at vessel to be legal the manufacturer just have to state that the boat complies. Sort of 'put your hand on the Bible and say Yes'.
No controls are performed by any authorities.

 

[jfm]

it would have qualified for a VAT return on the export from the EU.

If you mean a cash payment to boat owner by HMRC when boat leaves EU then I wish you well, but err don't count on this one.

 

[Spi D]

Sorry for not being clear. Once private persons pay VAT it stays with HMRC.

If exported by a registered company the boat is sold without VAT and the importer, at his end would, have to pay his local import taxes.

 

[Tranona]

And this is because it would have qualified for a VAT return on the export from the EU. Therefore, carrying the status of 'non-VAT'ed' while out, it would have to be VAT'ed on the re-import.
And ofcourse the VAT should be calculated on the value on each occasion.

Being born wihtin the EU does not mean it was initially VAT'ed within the EU as it may have been exported directly, to be VAT'ed in the destination country.

Virtually all recreational craft built since 16 June 1998 and intended for sport and leisure use, may only be placed on the EEA market or put into service within the EEA if they meet the essential safety requirements set out in the Recreational Craft Directive – 2003/44/EC. These regulations apply to all recreational craft between 2.5 and 24 metres in hull length whatever the means of propulsion. They may be fully built or partly completed; constructed within, or imported from without the EEA. The builder, importer or owner, or the person putting the craft into EEA service, (the responsible person) has a legal obligation to ensure that the craft meets the relevant requirements and to carry out the appropriate CE marking.

Each and every boat needs to be CE marked as proof of compliance with the Recreational Craft Directive. Referring to the type being certified is not enough.

For imports the same date applies: If imported (marketed) to the EU later than 16. July 1998 - regardles of age, it must comply.
To support this, many insurance companies will not cover boats lacking the certificate.
There is an exemption for self-made boats if sold later than 5 years from date of production.


A bit funny though, that for at vessel to be legal the manufacturer just have to state that the boat complies. Sort of 'put your hand on the Bible and say Yes'.
No controls are performed by any authorities.

Most of this is irrelevant to the example under discussion. The boat was built in 1966 and sold abroad. All this is way before both VAT and RDC/CE were even thought of. However, if the boat is imported into the EU VAT is normally due unless the boat complies with the limited number of exemptions (mainly re-imported by the person who exported it, as part of personal chattels for somebody taking up residence or temporary importation for repairs).

RCD/CE compliance is indeed also required unless the boat was manufactured in the EEA before 1998 - even if it was never sold in the EEA. Boats sold in the EEA since 1998 would comply, even if they were subsequently exported and re-imported. However, a boat could be built in the EEA and exported without being CE compliant and woulkd therefore need to comply if subsequently re-imported.