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Old 02-28-2006, 11:08 PM   #1
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Default VAT Where should i pay it?

Hi I am in the prosess of buying a boat in Miami. i am from the UK and as i will be taking it back to the UK, i will need to pay the vat. I am happy to pay VAT (that's a little lie)in the UK but am worried as how to get it back without having to pay it in other countries.

Also i want to register the boat in the UK, whats the best way of doing this, can i do it before i sail her home.

CAN ANYONE HELP ME[:I][:I]

Mark
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Old 02-28-2006, 11:36 PM   #2
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Hi Mark,

You should re-confirm my responses by asking the question again on www.ybw.com. Where more UK based sailors and some legal eagles are always keen to give advice.

I understood YES you can register a ship in the UK even if it's purchased in the USA and even if you then plan to keep her overseas. But why would you want to?

If it's just to keep her in UK waters, why not consider using a better value EU location to pay your VAT? In Malta I believe the VAT rate is possibly 33% lower than UK - and there are sure to be others in the rapidly growing EU.

Once VAT paid somewhere in EU, no issues in using her full time in UK waters.

Check it out - suspect you'll have lots of options to consider.

Cheers

JOHN
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Old 03-01-2006, 05:36 AM   #3
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Mark

Don't worry!

If you go back via Bermuda they don't ask.

When you get to the Azores tell them you are paying Vat in UK.

When you get to UK .....

I will be going back to UK from USA May / June 2007. Virginia for 2006.
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Old 03-01-2006, 02:40 PM   #4
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Hi,

I am not so sure the advice to tell them in the Azores that you will pay VAT in the UK will suffice. It depends on the Azores' status. The Azores, I know, are part of Portugal and unless some special status exists, such as with the Canary Islands, you should, if you enetr the EU in the Azores, pay VAT there. Check it out. it may be a good idea as Portuguese VAT may be much lower than that of the UK.

One other point. Don't forget that hatefull Euroipean Small Craft Directive with its requirement to have imported boats certified. I found a lovely boat here in South Africa which I wanted to take back to Sweden but the hassle and cost of getting it certified as well as paying VAT on it made the whole project unworthwhile.

Whatever you choose to do, good luck with your boat.

Stephen

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Old 03-01-2006, 08:56 PM   #5
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Mark:

As usual, Stephen's comments are worth considering. But to start, let's go back to the beginning.

Upon completion of the purchase in Miami, how are you planning to register the boat? If the answer is 'I wanted to wait...' then the reality is that you'll be cruising a stateless vessel. On clearing into the Bahamas, Bermuda etc. you'll be asked to present the ship's papers and, if stateless, you'll only have your Bill of Sale. Depending on the official and the nature of the island culture, that may be enough to invite the local Customs Office to consider whether you are liable for their form of tax; they are not required to honor any reciprocal agreement re: foreign flagged vessels in their waters simply because you are not 'flagged'. Cruising without ship's papers (registration or documentation) IMO means you assume maximum risk re: taxation.

Florida offers a 90 day permit (see the Dade County Tax Collector) for vessels purchased but not intended to remain in Florida. That will give you "something" re: registration but I don't think it will be very impressive to a foreign customs officer and in any event you may need that time period to prepare the boat before departure.

My suggestion - to remedy this first problem - is to consider the cost of registering the vessel in one of the non-sales tax U.S. states; you can find a list of these at www.boatus.com/gov/state_boat.htm E.g. both NC and SC are not too far away, neither levies sales tax of substantial amount, and personal property tax is probably voided if you have the boat out of that state on the day of taxation.

Assuming you arrive in the Azores with U.S. state registration, I suspect you will be able to avoid taxation on entry into the EU...but remember that you are liable for VAT and they could decide they are going to enforce that rule. I believe Portugal is currently close to the UK's 17.5% VAT rate, so for you perhaps this would acceptable. In case you haven't been there, all the clearance ports in the Azores are well staffed and equipped, the officers come from the main Portugese mainland ports for rotation duty, and things are done properly (if also very graciously). This not a backwater destination.

An alternative is to register your boat (e.g. SSR) in the UK. Start by reading Notice 8 published by HM Customs on their website; very helpful and representative of what is enforced in the UK. This would be my choice in your shoes IF I had the RCD issue sorted (see below); remember that this does obligate you to pay VAT on arrival but you seem prepared to do that. Alternatively on arrival, you can place the boat in e.g. St. Peter Port or Guernsey and you'll be VAT exempt...but have to travel each time you use the boat. And BTW I found the sailors least savvy about VAT as it relates to boats coming in from outside the EU are EU sailors, which includes Brits. Rather than go to one of the YBW BB's, I'd go to the 'source' which is HM Customs. They are, as you no doubt know, both polite and helpful - even if every office seems to have their own view on these matters, which is why I recommend starting with Notice 8.

Have you resolved how you will deal with the RCD? This EU mandate - http://europa.eu.int/comm/enterprise/newap...t/reccraft.html - means, for you, that on arrival in the UK and if UK registered, your vessel is immediately eligible to be impounded at the dock because she is not compliant with the RCD but registered inside the EU. Some HM Customs folks are very rigid about this; others less concerned. One of your countryman, on sailing his SSR UK-registered boat to the W coast of England from Vancouver, Canada was immediately told the boat was not seaworthy, he was subject to be big fine, and the boat was locked to the dock. It's been a fairly notorious incident and Ian wrote a great article on it in one of the YBW magazines (YM, I believe). You want to have RCD sorted BEFORE you arrive in the UK *unless* you arrive as a (state) U.S. registered vessel.

You've got several related but distinct issues here - VAT, ship's registration and the RCD - and they each can be complicated. This is one of those nuisance issues that takes time but, if not done thoughtfully, can create lots of bureaucratic hassles later. As for sailing off to Malta to register, that would be your cheapest option IF the VAT rate there remains really low - I hear various percentages quoted and don't know how current any of them are. BUT that takes you on a different cardinal heading and I gather that's not in the cards. Of course, you can always stop in Gib and register her absent VAT; I don't think that's any different than registering her in the Channel Is.

Good luck to you; if you'd like a bit more info on VAT as it relates to boats & sailors (as seen from a non-EU perspective), I've written a piece on that topic which is found at www.svsarah.com; select 'WHOOSH' and then choose the individual article.

Jack
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Old 03-02-2006, 11:43 PM   #6
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Thank you all for your help

Mark
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Old 03-06-2006, 08:50 AM   #7
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Mark,

I'm no expert on this but looked into bringing a yacht back to UK a couple of years ago. My understanding is you should arrange in advance to pay VAT at your first port of call on entering EU or one of its admin territories. An attractive option for me was Madeira (Portugese admin)where the VAT rate was 13% and a good sailing staging post. Still is 13% I think so maybe worth a dip. In the end I didn't go ahead with buying in the US - the RCD/CE issue Jack and Stephen talked about was a very expensive show stopper. Searching in the Caribbean for a CE badged boat might be an option.

Ron
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