VAT paid status expires 1st Jan 2021 for UK registered boats kept abroad long term . 30,000 boats probably affected

[TernVI]

It’s a big - and cruel - hit for those wanting to go on an extended cruise. Anyone wishing to spend a few years cruising away from U.K. - Med? Caribbean? RTW? - now faces a stark choice between having to return to U.K. within 3 years of leaving, or get stung for VAT again on return.

Nothing has changed for those people.
Exceptions have always been made for people doing genuine extended cruises.

 

[Graham376]

That has potentially always been the case when you take any goods out of the country for more than 3 years.

It doesn't seem that unreasonable in most cases, that if you've not brought your boat back in the last 3 years because it's permanently based in say Greece, then you've basically permanently exported it. It remains "VAT paid" in the EU and you can sell it anywhere in the EU in the future, so you or anyone else can carry on using it in the same way as you've been doing for the last 3+ years.

You're missing the point. The UK and EU are, until 31/12, one common territory so a boat kept in another State has not been exported, it's just at a different address.

 

[Goldie]

Nothing has changed for those people.
Exceptions have always been made for people doing genuine extended cruises.

On the contrary, it HAS changed. HMRC has confirmed to me in writing that the days of that exception (waiving VAT liability for returning cruisers providing that the boat returned ‘in the same ownership and same condition’) are no more and that VAT WILL be charged.

 

[TernVI]

On the contrary, it HAS changed. HMRC has confirmed to me in writing that the days of that exception (waiving VAT liability for returning cruisers providing that the boat returned ‘in the same ownership and same condition’) are no more and that VAT WILL be charged.

Were they talking about boats which have been continuously voyaging around many countries, or boats 'based' abroad?

There are very few people sailing contnuously for 3 years or more, and a lot of people flying around the world spending a few months here and there on their boats. I guess the few returning from continuous voyaging would be treated as returning expats who have been non resident for tax.

It's always been a case of HMRC 'waiving' tax which was technically 'due'.

 

[Goldie]

Were they talking about boats which have been continuously voyaging around many countries, or boats 'based' abroad?

There are very few people sailing contnuously for 3 years or more, and a lot of people flying around the world spending a few months here and there on their boats. I guess the few returning from continuous voyaging would be treated as returning expats who have been non resident for tax.

It's always been a case of HMRC 'waiving' tax which was technically 'due'.

Yes the tax has always been technically due under the RGR rules but the letter I received just pointed at the regulations and stated that those will now be applied to ALL boats.

 

[JumbleDuck]

Yes the tax has always been technically due under the RGR rules but the letter I received just pointed at the regulations and stated that those will now be applied to ALL boats.

I wonder how they will find these boats?

 

[Goldie]

I wonder how they will find these boats?

Agreed! There might be a lot of boats without AIS!

 

[ithet]

Yes the tax has always been technically due under the RGR rules but the letter I received just pointed at the regulations and stated that those will now be applied to ALL boats.

Did this not always apply to similarly to all boats returning from outside the EU? According to the CA it was rarely enforced. So, RGR will soon apply to all boats returning from EU also. The HMRC are hardly going to put in writing that they are not going to enforce a rule.

 

[Goldie]

Did this not always apply to similarly to all boats returning from outside the EU? According to the CA it was rarely enforced. So, RGR will soon apply to all boats returning from EU also. The HMRC are hardly going to put in writing that they are not going to enforce a rule.

I take your point but my question was simple in that I asked about the HMRC ‘waiver’ on the basis of the boat returning in the same ownership and same condition and whether that could still be requested - that has been stated as HMRC ‘policy’ (formal or otherwise) in the past. The answer was a straight ‘no’. I will not be gambling a significant sum (even on my 25 year old boat) either on avoiding being detected or finding an officer in a benevolent mood on my return. I wouldn’t want to head away for >3 years without an awareness of my liabilities on return!

It won’t matter if the boat is returning from EU or elsewhere; in fact, I think the EU connection is a bit of a smokescreen hiding behind B***** as this is a decision that lies totally with the U.K.

 

[greeny]

The unfairness is that having paid VAT to the UK authorites once on buying their yacht they want it paid a second time when the owner brings it back into UK waters.

I'm sure many of us get a bit fed up with those who tell us on leaving the EU we must now deal with the consequences. It was because we want the consequences that some of us voted to leave - if there were no consequences what would would be the point of choosing to leave?

That doesn't mean we want consequences which are (a) entirely within the UK government's control, and (b) require us to pay tax twice over and (c) will simply encourage us, when the time comes to sell our boats, to do it within the EU, giving the work and business to EU yards and brokers.

It would be different if we had got a VAT refund when the boat left the UK, or if it had been supplied VAT free for export. But to charge us VAT twice is barmy.

Not being a Vat or tax specialist this may sound stupid to many on here but:-
if it were deemed that your boat was "exported" at some time prior to brexit, and they now intend to charge you vat on its return to uk, then surely there is a claim that can be made for return of original vat paid as as result of the leaving the uk in the first place? What's good for the goose ..............? If this is true then the vat man is going to lose far more than he stands to gain.
Or we just say we exported them on the 1st January and claim the vat back.
Not going to fly I know but it seems so unfair to tax the same person twice on the same goods. Maybe an angle in there somewhere.

 

[goeasy123]

You're all missing a much bigger issue.

HMRC's decision will damage UK industry, reducing income and employment prospects. NET tax returns will fall. Never mind the relatively minor inconvenience to current owners, post transition, why would anyone wanting to cruise in Europe or anywhere around the world buy a boat or equipment in the UK?

This is a huge HMRC own goal.

 

[Sandy]

Surely England and Wales. The sanest part of the UK was somewhat agin the idiocy, as was Noriron

As a Scot marooned in England I understand your comment.

 

[TernVI]

You're all missing a much bigger issue.

HMRC's decision will damage UK industry, reducing income and employment prospects. NET tax returns will fall. Never mind the relatively minor inconvenience to current owners, post transition, why would anyone wanting to cruise in Europe or anywhere around the world buy a boat or equipment in the UK?

This is a huge HMRC own goal.

The ongoing situation of the UK not being in the VAT union is not something HMRC have any influence over.

 

[Goldie]

You're all missing a much bigger issue.

HMRC's decision will damage UK industry, reducing income and employment prospects. NET tax returns will fall. Never mind the relatively minor inconvenience to current owners, post transition, why would anyone wanting to cruise in Europe or anywhere around the world buy a boat or equipment in the UK?

This is a huge HMRC own goal.

Not missing the much bigger issue at all. I agree entirely and made those points - and more - in the letter I wrote to my MP. You’ll see from my location that we have a lot of harbours, boatyards, boatbuilders, chandlers, brokers and other marine industries in the constituency.

 

[Concerto]

What Is being impliedby HMRC is double taxation of a major asset. I doubt if the Daily Wail or some other newspapers will think it is wrong for rich yacht owners to pay this. However the majority of the population and hopefully the judiciary will think double taxation is morally wrong.

 

[Rappey]

I found this interesting and it explains most things boats, importing,exporting and vat status for most scenarios.
Also learnt some things I should not have done ?
Notice 8: sailing your pleasure craft to and from the UK

 

[tudorsailor]

Well this scuppers my plans to sail back to the UK from Greece next year and then to go onto the Baltic. I paid VAT when I bought the boat in 2007. I left the UK in 2010. I planned to winter here in 2021/2 to have some work done. Looks like I will be looking for an alternative on the "Continent" before going to the Baltic.

TS

 

[Concerto]

I found this interesting and it explains most things boats, importing,exporting and vat status for most scenarios.
Also learnt some things I should not have done ?
Notice 8: sailing your pleasure craft to and from the UK

This document is still refers to the UK being part of the EU and also the document was last updated 13 November 2018, so this may not be the position after 1 Jan 2021.

Section 1.4 quotes the laws that cover the notice. This quote at the end of the section is interesting.
"This notice is not the law. It is HMRC view of the law and nothing in this notice takes the place of the law. "

Section 3.4 quotes HMRC's interpretation of the law.
"A vessel that’s previously had VAT paid on it and been exported from the UK or EU may also qualify for relief on return if it:

• was imported normally within 3 years of its export from the UK or EU
• was imported by the person who exported it from the UK or EU
• has undergone no more than running repairs outside the UK and EU that did not increase its value"

This clearly states that the 3 year limit applies, but not to the person who exported the boat and returns with it.

At the bottom of the page is a box titled "There is something wrong with this page". Perhaps we should all start clicking it as it is out of date and does not cover the UK leaving the EU.

There again, we may still find alterations to HMRC's advice if a trade deal is done with the EU before 31 Dec 2020.

The biggest problem is still the 90 days in 180 day in my opinion. Both of these issues need to be resolved quickly by the UK government.

 

[TernVI]

...

The biggest problem is still the 90 days in 180 day in my opinion. Both of these issues need to be resolved quickly by the UK government.

The UK government has bigger issues to sort than the privilege of non-working people to spend more than 90 days in another country where they don't have residence.

 

[Bristolfashion]

As a Scot marooned in England I understand your comment.

"Marooned" in England? Have you been barred from returning due to some dark deed? Wearing underpants under the kilt perhaps or consumption of Australian whisky.