VAT

[goeasy123]

A UK registered and owned boat is Union Goods if it was EU VAT paid and in the EU at the end of the Transition period. The VAT invoice is from a UK company, VAT paid to HMRC, pre BREXIT and the Bill of Sale is dated pre BREXIT.

After a number of transactions the boat is sold to a new owner, an EU citizen. At some point the registration is charged to an EU country. The Bill of Sale is dated post BREXIT showing a sale transacted, in good faith, in the EU bwteen EU residents.

Does the new owner have to maintain proof that the boat was in the EU at the end of the TP or has that requirement lapsed through sales?.... Does the relevant rule relate to the flag state of the boat or the EU country in which the VAT was paid?

 

[Tranona]

A UK registered and owned boat is Union Goods if it was EU VAT paid and in the EU at the end of the Transition period. The VAT invoice is from a UK company, VAT paid to HMRC, pre BREXIT and the Bill of Sale is dated pre BREXIT.

After a number of transactions the boat is sold to a new owner, an EU citizen. At some point the registration is charged to an EU country. The Bill of Sale is dated post BREXIT showing a sale transacted, in good faith, in the EU bwteen EU residents.

Does the new owner have to maintain proof that the boat was in the EU at the end of the TP or has that requirement lapsed through sales?.... Does the relevant rule relate to the flag state of the boat or the EU country in which the VAT was paid?

Very simple. VAT is nothing to do with flag registration, citizenship or residence of owner or Bill of Sale. If it was in the EU on 31/12/2020 it is considered EU goods "EU VAT Status" irrespective of where VAT was originally paid. The normally accepted evidence is third party confirmation of its location on the day. This the EU "rule" from the withdrawal agreement, However do not be surprised if some states (Greece in particular) have difficulty in accepting this for a boat with a complex history and may choose not to treat it as Union goods and allow free circulation.

 

[srm]

Have just done as you described. Local customs in Azores accepted my UK reg boat as being Union Goods and left it at that. New owner is Portuguese national and placed the boat on Polish registry. It will be kept in the Azores for the foreseeable future. I left all the relevant paperwork with the boat including marina bills and local boat tax receipts from its arrival in the islands and copies of the British registration plus cancellation certificate. Sale was last month so no feedback regarding local customs etc. as yet.
Would suggest that all relevant documentation goes with the boat. It is then up to the new owner who bought the boat knowing its provenance.

 

[goeasy123]

It makes logical sense that the VAT paperwork and proof of presence in the EU should be persistent, but I'm struggling to find any reference in the transition agreement relating to post Brexit UK VAT payment being a trigger for the 'being in the EU at the end of TP' condition. Any other reference to vessels in the agreement, of which there are a few, refer exclusively to flag state. Can you point me at the relvant section?... or is it in one of the many documents referenced in the TA?

I know of a least two EU citizens that own EU27 registered boats. They have owned them since long before the end of the TP and the boats were UK VAT paid long before the UK left the EU. They're adamant that they not subject to any part of the transition agreement. This seems logical as they have no association with the UK and they have never been to the UK on their boats and they bought their boat from previous EU resident owners.

 

[KompetentKrew]

I don't fully understand your question but imagine you own a valuable electric guitar. Before Brexit it doesn't matter where you buy it - UK or the rest of EU - you pay VAT when you buy it and you can carry it between countries and it doesn't make any difference. After Brexit, you have to pay VAT and import duty if you export the guitar from one country to the other (EU to UK or UK to EU, either way). Same with your boat - the boat was "resident" in the country in which it lay when UK left the EU (transition period) and you have to pay VAT again if you import it.

 

[goeasy123]

I don't fully understand your question but imagine you own a valuable electric guitar. Before Brexit it doesn't matter where you buy it - UK or the rest of EU - you pay VAT when you buy it and you can carry it between countries and it doesn't make any difference. After Brexit, you have to pay VAT and import duty if you export the guitar from one country to the other (EU to UK or UK to EU, either way). Same with your boat - the boat was "resident" in the country in which it lay when UK left the EU (transition period) and you have to pay VAT again if you import it.

Imagine.... I'm French. My '59 Les Paul, once own by Peter Green was bought in Demark Street, London, VAT was paid and it was taken back to France in 2000. In 2001 I sell it to a Spaniard who takes it to Spain. In 2002 it's sold on to another Spaniard. Since then it's never left the EU. In 2024 the Spaniard get stopped in Madrid by a Agencia Estatal de Administración Tributaria official who asks him to provide proof his guitar was somewhere in the EU at the end of the TP.... I think not.

Imagine.... I'm French. I buy a boat in Brighton marina from an Englishman and sail it to France in 2000. In 2001 I sell it to a Spaniard who reregisters it in Spain. In 2002 it's sold on to another Spaniard. Since then it's never left EU waters and its been Spanish registered since 2001. Does it have to have proof it was in EU water at the end of the transition period? The guitar doesn't.