How does the VAT thing work on used boats.
Discussion
Buying a used boat is similar to buying a used car - vat is only paid on the boat when new, then it is vat exempt. The only exception to this is when the boat was purchased from new by a company for charter etc, and they claimed the vat back. Vat will then have to be paid when purchasing.
Those two information sheets from the RYA re-itterate what I stated with regard to used boats - vat is paid on them when new, and then they are vat exempt. As they say, it is important to check that the broker who is handling the sale or the private individual you are buying from can produce an original vat certificate (usually an invoice) to prove that vat was paid when new.
Obviously this only applies to boats that are in the EU, and not outside it - importation is another ball game altogether!
Check the provenance of the Sealine SC39 - make sure the chain of ownership is there - if buying from a broker, ask to see the paperwork. If he is worth his salt, he won't mind!
We handle these things every day, so if I can be of further help. email me on my own address.
Obviously this only applies to boats that are in the EU, and not outside it - importation is another ball game altogether!
Check the provenance of the Sealine SC39 - make sure the chain of ownership is there - if buying from a broker, ask to see the paperwork. If he is worth his salt, he won't mind!
We handle these things every day, so if I can be of further help. email me on my own address.
CE approval is another thing altogether. Any vessel that has been used in EU waters, or imported into the EU since the 16th june 1998 has to meet the standards set by the Recreational Craft Directive. This is basically a safety check on the vessel itself and its equipment. It is illegal to sell a vessel in this country that is not RCD compliant, and has the necesary paperwork to prove it. This has made it less desirable to import boats from the States for instance, as you have to get the boat CE marked when it gets here, which can prove expensive. From the trades point of view, this is a good thing!
GilesS3 said:
CE approval is another thing altogether. Any vessel that has been used in EU waters, or imported into the EU since the 16th june 1998 has to meet the standards set by the Recreational Craft Directive. This is basically a safety check on the vessel itself and its equipment. It is illegal to sell a vessel in this country that is not RCD compliant, and has the necesary paperwork to prove it. This has made it less desirable to import boats from the States for instance, as you have to get the boat CE marked when it gets here, which can prove expensive. From the trades point of view, this is a good thing!
as you seem to be well into boats do you know of a twin/single engined formula for sale up to 31ft ??GilesS3 said:
No I don't, but I do have two Scarab 29's for sale, one with a brand new Mercruiser 498 HO Magnum, 460 hp. The engine still has two years warranty on it! Can look out for a Formula if that is what you want.
yes please a formula is a bit better trimed out than a scarab to be honest would even buy one wanting engine work or re-trimingVAT is always an issue and is becoming more so. I spend most of my working life sorting out issues regarding VAT and yachts.
VAT has to be accounted for in almost every instance. The fact that a vessel passes from a private individual to a private individual does not necessarily provide conclusive evidence of its VAT-paid status.
If the vessel is in the UK and is not VAT-paid, then it must either be on a company's VAT-number or owned by a non-EU resident. If this vessel is then sold to a private individual whereupon VAT will be due, it is normally chargeable on the value of the vessel at that time.
One really important thing to remember that is not usually well known, is that if a EU VAT-paid vessel transacts outside of EU waters, any VAT-status which it may have enjoyed is then reset. In effect, it will lose its VAT-paid status and VAT will be due all over again on return to EU-waters. DO remember that the Channel Islands are outside of the EU for the purposes of VAT!... By all means, buy or sell in the Channel Islands, but makes sure that the vessel comes back to either the UK or France to formally 'transact'.
Perhaps the most annoying aspect of VAT is that HM Customs has long-since closed their Dover Yacht unit which assisted private yachtsman with establishing the VAT-status of their yachts. In the good old days, you could send all your bits of paper to the Dover unit and their would send them back with a ruling letter. This doesn't happen anymore and it is often almost impossible to get a conclusive written ruling from the Customs departments.
CE compliancy is of course the other issue. This is tied up with the European Union's Recreational Craft Directive. It is a criminal offence not to comply with the terms, and although it is not actively policed in the UK (and therefore many boat-owners ignore it), it could have disasterous effects on your insurance coverage in the event of an accident (a non RCD-compliant or exempt vessel will legally not be 'safe' for use in the EU).
Fortunately, when the RCD was introduced, the came up with an exemption policy which covered all vessels 'in use' within the EEA prior to the 16th June 1998. The EEA is the EU plus it's outerlying economic territories. This includes places such as Bermuda, Dutch Antilles etc etc. This becomes a saving grace for many of the rather lovely US-built sailing yachts which have cruised the Eastern Seaboard of the States for many years.
If you need to make the vessel compliant, it is best to factor in approx £6k for the average 45ft yacht.
There is no shortage of VAT-consultants and RCD-consulants out there, but as with me, they will almost always charge for their services. If you are a member of the RYA, this could be the best place to begin.
VAT has to be accounted for in almost every instance. The fact that a vessel passes from a private individual to a private individual does not necessarily provide conclusive evidence of its VAT-paid status.
If the vessel is in the UK and is not VAT-paid, then it must either be on a company's VAT-number or owned by a non-EU resident. If this vessel is then sold to a private individual whereupon VAT will be due, it is normally chargeable on the value of the vessel at that time.
One really important thing to remember that is not usually well known, is that if a EU VAT-paid vessel transacts outside of EU waters, any VAT-status which it may have enjoyed is then reset. In effect, it will lose its VAT-paid status and VAT will be due all over again on return to EU-waters. DO remember that the Channel Islands are outside of the EU for the purposes of VAT!... By all means, buy or sell in the Channel Islands, but makes sure that the vessel comes back to either the UK or France to formally 'transact'.
Perhaps the most annoying aspect of VAT is that HM Customs has long-since closed their Dover Yacht unit which assisted private yachtsman with establishing the VAT-status of their yachts. In the good old days, you could send all your bits of paper to the Dover unit and their would send them back with a ruling letter. This doesn't happen anymore and it is often almost impossible to get a conclusive written ruling from the Customs departments.
CE compliancy is of course the other issue. This is tied up with the European Union's Recreational Craft Directive. It is a criminal offence not to comply with the terms, and although it is not actively policed in the UK (and therefore many boat-owners ignore it), it could have disasterous effects on your insurance coverage in the event of an accident (a non RCD-compliant or exempt vessel will legally not be 'safe' for use in the EU).
Fortunately, when the RCD was introduced, the came up with an exemption policy which covered all vessels 'in use' within the EEA prior to the 16th June 1998. The EEA is the EU plus it's outerlying economic territories. This includes places such as Bermuda, Dutch Antilles etc etc. This becomes a saving grace for many of the rather lovely US-built sailing yachts which have cruised the Eastern Seaboard of the States for many years.
If you need to make the vessel compliant, it is best to factor in approx £6k for the average 45ft yacht.
There is no shortage of VAT-consultants and RCD-consulants out there, but as with me, they will almost always charge for their services. If you are a member of the RYA, this could be the best place to begin.
Having just gone through this loop in depth buying a new boat, unless you are going to be spending more than £500k on the boat, the sums really don't make sense to set up a company etc. Also note that the revenue have decide that they are going to crack down on VAT exempt boats and if you can't prove it's a real business then you'll get a VAT demand....
SpeedYellow said:
Having just gone through this loop in depth buying a new boat, unless you are going to be spending more than £500k on the boat, the sums really don't make sense to set up a company etc. Also note that the revenue have decide that they are going to crack down on VAT exempt boats and if you can't prove it's a real business then you'll get a VAT demand....
as my learned friend quiet rightfully points out... if try to take the piss, you'll find yourself in a spot of bother... I was privy to an internal RYA memo a few years ago which basically said that if HM Customs suspected that you were trying take the piss, it wouldn't be just the books for your boat they would be looking at!the other area which you need to be VERY careful with is leasing schemes which are a vehicle for reducing the VAT-liability. what might have legitimate in the UK some time ago, and perhaps is still legitimate in other parts of Europe, may well not be legitimate now. we may all be in the EU, but you try saying that to a customs officer who has just arrested your yacht!
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