VAT Status post Brexit

[grumpygit]

It's handy that a precis of two elements is available in one place. The information therein (and much more) has been freely available for aeons and has been the basis for informed comment on these forums for a similar length of time. That hasn't stopped ill-informed flights of fancy, as this thread demonstrates.

Fair comment, I should have said a probable explanation and at the end of the day no one knows exactly what or how it will effect the boaty and marine industry as the news can change daily.
But discussing it on this or any forum should not be vilified.

 

[Irish Rover]

This may well be a stupid question but I'll take a risk and ask it anyway. The general consensus appears to be that all UK boats which currently are classed as EU, VAT paid will retain that status after Brexit. Presumably it's safe to assume the UK will have its own VAT regime for boats post Brexit. So my possibly stupid question. Will all EU, VAT paid boats from the other 27 be classed as UK, VAT paid under the new UK tax arrangements.

 

[Graham376]

So my possibly stupid question. Will all EU, VAT paid boats from the other 27 be classed as UK, VAT paid under the new UK tax arrangements.

Not stupid. My "guess" is that boats in either location will retain their status in UK and EU as long as they remain in the same ownership. However, if they change ownership in UK I think they will lose their EU VAT paid status as does a boat sold in say Turkey now and then re-imported. Maybe a boat sold in the EU will lose it's UK VAT paid status as well. Until any deals are finalised, we won't know for certain.

 

[dunedin]

This may well be a stupid question but I'll take a risk and ask it anyway. The general consensus appears to be that all UK boats which currently are classed as EU, VAT paid will retain that status after Brexit.

Unfortunately that is not a consensus that the RYA concurs with under a No Deal scenario, as apparently the information they have received implies that Boats in the U.K. on Brexit Day would lose their “Union Goods Status”. See full text here - https://www.rya.org.uk/knowledge-advice/current-affairs/Pages/no-deal-Brexit-scenario.aspx
Whilst some may say this is scaremongering, and the RYA are pushing for this not to be the case, it is based upon their knowledge and direct links to HMRC and EU officials, so may be better informed than forum wishful thinking.

The other aspect of how any future U.K. “VAT” might be treated in the EU27 is another layer of uncertainty beyond, which I doubt that any official body has looked at

 

[macd]

Will all EU, VAT paid boats from the other 27 be classed as UK, VAT paid under the new UK tax arrangements.

Not stupid at all. There must be many such vessels, and one would hope they are treated in that way. As I mentioned earlier, the issue is far from confined to boats, and there must be £billions-worth of VATable property which has done the trip one way or the other. Imagine trying to sort that lot out... Deeming everything that is currently VAT-conformant also post-Brexit conformant seems by far the simplest (compelling) and fairest (perhaps not quite so compelling) way. (I don't expect the Guardia Fiscale to knock on our door to arrest our telly or settee

Almost certainly UK VAT rules won't change at the instant of Brexit, not least since there will be nothing to replace them with. They may then diverge over time.

You might also consider the reciprocal of the example Vic raised in post #49, and my reply to it.

So far as I know HMG has yet to offer any guidance on the matter.

 

[grumpygit]

At the end of the day I believe it'll be what Brussels wants, not what our bunch of incompetents ask for. I can't see how VAT can be charged twice in a pre Brexit situation. Post Brexit will be a completely different going on and a strong possibility of a double whammy of VAT if you get it wrong.

 

[macd]

I can't see how VAT can be charged twice in a pre Brexit situation.

It can't, and very expressly so, in the absence of of special circumstances (such as export and re-importation). Specific examplars can be found on line on EU pages, (mostly relating to road vehicles, which are treated much like leisure craft).

 

[Irish Rover]

I think the RYA position is sensible. UK boats actually in the EU when the plug is pulled will enjoy a special status the same as UK citizens resident in the EU. UK boats outside the EU on B day will lose their Union status. I'd imagine the same will apply to EU boats actually in/outside the UK on B day. I wouldn't see these arrangement having a significant affect on the value of boats.

 

[sailaboutvic]

Not stupid. My "guess" is that boats in either location will retain their status in UK and EU as long as they remain in the same ownership. However, if they change ownership in UK I think they will lose their EU VAT paid status .

How is anyone going to know where A sale took place ,
going back to my last boat just two years ago , it was sold privately by me in Greece , there nothing on the bill of sale to say where the sale took place .

 

[sailaboutvic]

I think the RYA position is sensible. UK boats actually in the EU when the plug is pulled will enjoy a special status the same as UK citizens resident in the EU. UK boats outside the EU on B day will lose their Union status. I'd imagine the same will apply to EU boats actually in/outside the UK on B day. I wouldn't see these arrangement having a significant affect on the value of boats.

The RYA is going to give that advise as there no other advise they can give , if they took the view as some of us here and said don't worry you won't get charged VAT a second time and by chance we did they could end up with a law suite on thier Hands .
Just like when they given the advise not to take Croatia up on the lower valve VAT payment , stating that as Croatia isn't in the EU yet and payment wouldn't be valid, guess what they was wrong there too , lot of owners from different EU saved thousand by paying in advance .

But it's as plain as day light there going to be no change to the VAT rule , other wise the other 26EU will have a big problem on there hands with owners of boats that started off in the U.K.

 

[Graham376]

How is anyone going to know where A sale took place ,
going back to my last boat just two years ago , it was sold privately by me in Greece , there nothing on the bill of sale to say where the sale took place .

That's crossed my mind as well, I can see two sales transfer documents, one in UK, the other in EU.

 

[Graham376]

I think the RYA position is sensible. UK boats actually in the EU when the plug is pulled will enjoy a special status the same as UK citizens resident in the EU. UK boats outside the EU on B day will lose their Union status. I'd imagine the same will apply to EU boats actually in/outside the UK on B day. I wouldn't see these arrangement having a significant affect on the value of boats.

Following this train of thought through, you're saying a UK boat in the EU would retain it's EU status. So, what happens when that boat is brought back to the UK? Presumably it will have lost its UK VAT status.

 

[sailaboutvic]

That's crossed my mind as well, I can see two sales transfer documents, one in UK, the other in EU.

Graham there are different sale documents now , I could had used a Dutch one if I wanted but as I am British I used one that I can understand . There nothing that I know of that say you have to use a bill of sale from your own country .

 

[Irish Rover]

Following this train of thought through, you're saying a UK boat in the EU would retain it's EU status. So, what happens when that boat is brought back to the UK? Presumably it will have lost its UK VAT status.

I'd imagine if the owner at B day remained the same and was resident in the UK it would qualify for "re-import" but if it changed hands in the EU then UK VAT would be payable. All guesswork mind you.

 

[LadyInBed]

T2L update
Filled in box 1,2,5,14,[15 17],31,32,33,35,38 and 54
Printed and Sent it off 30/1 without any other verbiage
It arrived back today all stamped up :encouragement:

 

[nortada]

Fair comment, I should have said a probable explanation and at the end of the day no one knows exactly what or how it will effect the boatie and marine industry as the news can change daily.

I would suggest that this a far bigger issue than pleasure craft and will extend across all forms of mobile equipment/property in both directions EU/UK and UK/EU and as such, it will be very difficult if not impossible to resolve.

Additionally, as it is a no gain situation for both parties (UK & EU), I think they will start at Day 1 (Brexit Day?), with whatever the new policy is but it will not be retrospective.

 

[Irish Rover]

But it's as plain as day light there going to be no change to the VAT rule , other wise the other 26EU will have a big problem on there hands with owners of boats that started off in the U.K.

Surely the scheme envisaged by the RYA offers absolute clarity in relation to that aspect and, as I said earlier, essentially mirrors what we expect will happen in relation to UK citizens resident in the EU at B day and vice versa. If a boat is VAT paid it doesn't matter about prior ownership. What matters is where the boat is located on B day with re-import provisions to regularise the status of boats in transit/on tour/temporarily abroad on B day.

 

[sailaboutvic]

Surely the scheme envisaged by the RYA offers absolute clarity in relation to that aspect and, as I said earlier, essentially mirrors what we expect will happen in relation to UK citizens resident in the EU at B day and vice versa. If a boat is VAT paid it doesn't matter about prior ownership. What matters is where the boat is located on B day with re-import provisions to regularise the status of boats in transit/on tour/temporarily abroad on B day.

How do we prove the boat was in the EU on B day or come to that six monther down the line or three or three years come to that , take your self , your in Turkey on B day , three months later your in Greece and your asked ( it won't happen ) where was the boat on B day , my boat sir was anchored in a bay in Italy , who to say other wise .

 

[Irish Rover]

How do we prove the boat was in the EU on B day or come to that six monther down the line or three or three years come to that , take your self , your in Turkey on B day , three months later your in Greece and your asked ( it won't happen ) where was the boat on B day , my boat sir was anchored in a bay in Italy , who to say other wise .

I hear what you're saying and I understand your point but I'd imagine [I'm using that phrase a lot] both sets of regulations will specify you can only retain VAT paid status in one of the two jurisdictions [UK or EU] so unless you're prepared to adopt creative illegal means you will be one or the other and there will probably be a time limited opportunity to re-import to your jurisdiction of residence if you're elsewhere on B day.

 

[grumpygit]

I suppose Greece is easy, You should have your DEKPA and if you leave or left the area or the EU the log should have been stamped as required. I do think your worry is unnecessary.
The VAT has only to be paid once within the EU unless the boat is sold on between businesses where the VAT would be claimed back on the VAT Tax Return.
Once it has gone in to private hands it can't return in to VAT status unless a VAT registered business buys it and is then put up for sale at some later point, this would be a crazy situation that no sane person would do. A private person cannot put it back in to VAT status with in the EU.
The initial bill of sale showing the VAT paid with in the EU is all that is required no matter how many owners the boat has in the future. It's the boat that is taxable not the person.