VAT & EU Registration & Brexit - help requested


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Tony Brighton
Tony Brighton
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Hi,

Posting below on behalf of a new joiner (Chris Bromley - in process) seeking help. Chris, resident in the Caymans, is buying a VAT-paid, Irish registered boat currenty in N.Spain and planning to go to the Caribbean then back to Europe.
Rgds
TonyB


What I'm hoping to find at this stage is authoritative advice on registration and VAT. I have heard that even though VAT has been paid, if a vessel spends time outside European waters VAT may be charged again on her return! The protection against the yacht being levied twice over is to keep the registration within Europe, I am told. The Dutch and Belgian registries were recommended on the grounds of easy to negotiate administration and reasonableness of charging. I decided not to apply for British registration because should the UK succeed in exiting the EU, the European authorities may then not regard the registration as a reason not to re-impose VAT - which would close off the prospect of a future Mediterranean voyage.I have phoned the UK register, but no one was able to say what the position would be in a year or two. Then again, not being resident in the UK, British registration would have to be within the Part I listing which I have heard is onerous and may need a dedicated measurement and tonnage survey.

In contrast to the British registry for which application can be approached through the UK. gov. office or web site, I could only find links through private companies to the Dutch and Belgian registers. Their various requirements are similar but not identical. The companies most attractive to me offered registration irrespective of location, nationality or European residence and the reassurance of being able to voyage anywhere under a maritime flag respected worldwide. On phoning, the information given out was that registration could be done even though I'm resident in Cayman and intend to keep the boat there, but that Dutch or Belgian registration would not permit the boat to be taken outside European waters. I read out over the phone the website home page introduction to protest that this was the opposite to what was on public / internet offer (and how indeed could either authority prevent movement outside Europe) and received a message the next day accepting there was no geographic restriction but now noting there was a requirement for residency in respect of Belgium. Reading over the opposite terms offered on the website did not result in a correction this time but I understood that Dutch registration would remain open to me. Terms for the branch of the Dutch register relevant to my craft set an upper limit on its speed capability way above its hull speed but this makes me wonder if the register is actually meant for small planing and coastal craft: I don't want to be clearing into the U.S. or Cuba, for example, only to find out the ship's papers are not acceptable. Another thing I didn't know is that marine insurance includes a tax payable to the registering authority. According to my prospective insurer, it's quite expensive at about twice the rate for Holland as for Belgium, but the registry agent could provide no supporting information on an insurance tax for either jurisdiction. I'd still be keen to get chapter and verse on the reputed rule restricting application to residents of Belgium even though the Belgian website states just the opposite.

So, I'd be most grateful for authoritative advice on the intricacies of private yacht registration. I should have preferred to go for the British part 1 listing for which the charge appears to be several times less than the Dutch or Belgian versions, but absolutely not if it risks the much larger cost of European VAT in future voyaging. I'd appreciate too any other advice you may wish to give, including the matter of changing the MMSI which I believe may need equipment to to returned to the manufacturer for resetting.
Gorm Gondesen
Gorm Gondesen
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To my knowledge there’s a rule in the EuU saying that if your outside EU- Vat Area for more than 3 years then you have to pay VAT again based on the current value of the boat at the time of return to EU-VAT-Waters. So if you return within 3 years there’s no problem.
Alex Blackwell
Alex Blackwell
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If your boat is indeed Irish registered, then I would assume it is part one (Comemrcial) registered as there is no small craft register in Ireland. In that case, why not keep it as Irish. I
If it is not on the Irish part one register, then it is not registered, though it may be Irish flagged.
We paid about 150 euros to get on the Irish part one register. What was required was an EU VAT cert and Naval architects drawings, so that the dept could determine the tonnage - nothing more. Once this was completed our boat was inspected and we had to show the registration number (small brass plaque screwed to a bulkhead and the name of the boat either side of the bow and on the stern. The inspection cost was included in the above fee.
Simon Currin
Simon Currin
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Today I received this email in which Peter Tanner, OCC Member, wishes to raise the profile of the UK Customs to enforce rigidly RETURNING GOODS RELIEF FOR UK VAT PAID YACHTS from 1st January 2021. I understand that Peter will be adding to this thread. He is suggesting that UK Members may wish to contact their MP's.
Simon

Simon, cc Rachelle,

I’m very sorry that you’re having to deal with the “Facebook” issue & you may rest assured you have my full support in the line you’re taking. Having got that off my chest I’m writing about another threat that does not appear to have a high a profile in our club. I’m concerned that maybe members do not appreciate the implications of HMRC’s proposal to apply RGR rigidly from 1 Jan 2021, with a possible 1 year extension.

For the 65 years I’ve been boating I’m not aware that any British private leisure vessel has had to set off for foreign waters in a UK VAT paid boat with the expectation that they will be charged ‘import VAT’ if their trip extends to more than 3 years. Indeed it’s an affront to common sense & fairness that HMRC should expect us to effectively pay VAT every time we return from voyages longer than 3 years. We have done 3 long trips which would have meant paying VAT 3 times. Most of us expect to pay tax & are happy to do so on a fair basis - this is manifestly unfair. It’s not specially a Brexit issue but it appears HMRC have chosen to try & implement this change of long established custom & practice during the Brexit fog. It seems to me that we’re missing the point in lobbying to extend the period before RGR is applied to yachts, welcome as the 1 year extension is.
While this is a big issue for those affected we owe it to all those sailors who might want to set off in the future to fight for retaining the status quo & resist the proposed changes. I hope I can count on the OCC’s active support. I don’t think we can leave it all to the RYA. A good start would be for every UK member to write to their MP.

Best wishes, Peter Tanner
s/v Oojah

ptanner
ptanner
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RETURNING GOODS RELIEF FOR UK VAT PAID YACHTS

Those UK members who are also in the RYA &/or the CA may have seen more comprehensive briefs on HMRC’s proposals. I have asked if I can reproduce these here but in the meantime can I explain why this is very important to us. Last month HMRC announced that from 1 Jan 2020 (subsequently deferred 12 months) they would be including UK VAT paid yachts in the scope of Returning Goods Relief (RGR). What does this mean?

IF YOUR VESSEL IS OUT OF THE UK FOR MORE THAN 3 YEARS YOU WILL BE LIABLE FOR UK IMPORT VAT ON RETURN.

I understand this will be based on the current value of the boat. These regulations have always existed but have never been applied to private UK leisure yachts. Formal ‘reporting in & out‘ procedures are likely to be introduced here next year so anyone thinking ‘how would they know’ should think again!
Even if this is unlikely to affect you directly, for the benefit of future sailors who will shareI our dreams of crossing the oceans I would implore you to write to your MP. Simon has reproduced the meat of my argument in the middle paragraph below. You can get your MP’s email address from Google - you must include your full name, address & contact details.
I believe all that’s needed is for government to instruct HMRC not to proceed with their proposal. Whilst it’s tempting to assume they have too much else on, it’s HMRC have chosen to try & slip this through under the fog of Brexit so I’m not sympathetic!
I know it’s tempting to leave it to others but ultimately government only responds to weight of numbers.
If the OCC members we’ve met on our travels are anything to go by I know I can count on your support.

Thanks, Peter Tanner
martintsmith@aol.com
martintsmith@aol.com
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I have just written to my M.P. and since there are a large number of boat owners in his constituency (Conwy Harbour in North Wales) I am hoping to get a supportive response.

Martin Smith
ptanner
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Martin, thanks
Daria Blackwell
Daria Blackwell
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Tony Brighton - 7/4/2018
Hi,Posting below on behalf of a new joiner (Chris Bromley - in process) seeking help. Chris, resident in the Caymans, is buying a VAT-paid, Irish registered boat currenty in N.Spain and planning to go to the Caribbean then back to Europe.RgdsTonyBWhat I'm hoping to find at this stage is authoritative advice on registration and VAT. I have heard that even though VAT has been paid, if a vessel spends time outside European waters VAT may be charged again on her return! The protection against the yacht being levied twice over is to keep the registration within Europe, I am told. The Dutch and Belgian registries were recommended on the grounds of easy to negotiate administration and reasonableness of charging. I decided not to apply for British registration because should the UK succeed in exiting the EU, the European authorities may then not regard the registration as a reason not to re-impose VAT - which would close off the prospect of a future Mediterranean voyage.I have phoned the UK register, but no one was able to say what the position would be in a year or two. Then again, not being resident in the UK, British registration would have to be within the Part I listing which I have heard is onerous and may need a dedicated measurement and tonnage survey. In contrast to the British registry for which application can be approached through the UK. gov. office or web site, I could only find links through private companies to the Dutch and Belgian registers. Their various requirements are similar but not identical. The companies most attractive to me offered registration irrespective of location, nationality or European residence and the reassurance of being able to voyage anywhere under a maritime flag respected worldwide. On phoning, the information given out was that registration could be done even though I'm resident in Cayman and intend to keep the boat there, but that Dutch or Belgian registration would not permit the boat to be taken outside European waters. I read out over the phone the website home page introduction to protest that this was the opposite to what was on public / internet offer (and how indeed could either authority prevent movement outside Europe) and received a message the next day accepting there was no geographic restriction but now noting there was a requirement for residency in respect of Belgium. Reading over the opposite terms offered on the website did not result in a correction this time but I understood that Dutch registration would remain open to me. Terms for the branch of the Dutch register relevant to my craft set an upper limit on its speed capability way above its hull speed but this makes me wonder if the register is actually meant for small planing and coastal craft: I don't want to be clearing into the U.S. or Cuba, for example, only to find out the ship's papers are not acceptable. Another thing I didn't know is that marine insurance includes a tax payable to the registering authority. According to my prospective insurer, it's quite expensive at about twice the rate for Holland as for Belgium, but the registry agent could provide no supporting information on an insurance tax for either jurisdiction. I'd still be keen to get chapter and verse on the reputed rule restricting application to residents of Belgium even though the Belgian website states just the opposite. So, I'd be most grateful for authoritative advice on the intricacies of private yacht registration. I should have preferred to go for the British part 1 listing for which the charge appears to be several times less than the Dutch or Belgian versions, but absolutely not if it risks the much larger cost of European VAT in future voyaging. I'd appreciate too any other advice you may wish to give, including the matter of changing the MMSI which I believe may need equipment to to returned to the manufacturer for resetting.

As to the MMSI number change, we were able to have a certified electronics technician change our MMSI number without sending it back to the manufacturer.



Vice Commodore, OCC 
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