Sailing in EU after Brexit

[vasko]

Does anyone know what we will need after Brexit ?

E.g. my understanding is that if we have a proof that the boat has been in greek waters for example at Brexit point (TEPAI, Marina invoice, harbour mooring receipt) the boat will be considered EU VAT paid, but we will still need Transit Log and it allowed only 18 month in EU ?

[Mistroma]

I thought that the fact a boat was in the EU and already VAT paid in January 2021 meant that it could remain there forever.

Isn't the 18 month thing simply a requirement to leave or else pay VAT. You can return the next day and the clock starts running down for another 18 months. I understood that nothing would change for me in that respect and it wasn't an issue.

However, RYA and CA seem to be saying that HMRC have changed their mind regarding return to the UK after 3 or more years outside the UK. The previous position was that you could return without a problem as HMRC were happy to give an exemption under Return of Goods. It seems possible that HMRC will now expect VAT payment a second time when a boat returns from a long stay in the EU. Pretty certain I won't be sailing back to UK if that is correct.

The other issue is obviously the limit of 90 days in a rolling 180 day period for people, nothing to do with the boat. It was always a problem in theory as it applies to all EU citizens and Greece requires registration after a 90 day stay. However, I have never heard of anyone (Swedish, British, Irish etc.) bothering to do anything. It will be different in 2021 and the window for UK citizens to register for a "buff card" closes at the end of this year. Covid has prevented me registering as I believe it has to be done in person.

No certainty about any of the above as it is based on my understanding of the current situation. UK gov, HMRC, EU , Greek Gov. and so on can all change the rules or how they will implement them.


My own plan is to enter on my Irish passport instead of my UK one and then register to remain after 90 days. I can still do this as an EU citizen and that process will not change. I am only bothering to do this because my wife only has a UK passport and will therefore draw attention to both of us. I can then use a different form to apply for my wife to remain with me in Greece.

The rules for 3rd county nationals overstaying enable Greece to fine, jail and also mark my wife's passport to prohibit her return to EU for a variable period (max. 5 years I think). I personally doubt the Greek Government want to throw out lots of UK citizens. The risk of a severe penalty, especially exclusion, means it is a no-brainer to apply for permission to stay longer than 90 days.

A further complication is that we own the boat jointly (one EU citizen and one UK citizen). I might get a document to transfer ownership to my name prior to 2021 just in case. I know that we should keep a crew list and get a transit log but don't know if my EU citizenship avoids the latter.

[vasko]

Also how we will prove that the boat is in EU waters at 31Dec - millions of variations here ...

[Mistroma]

I don't know of an official form. There could be one but I think I should have sufficient paperwork to prove status. I have the pretty meaningless but totally free T2L plus the documentation for payment of TEPAI last year. I will keep my contract and invoices for storage ashore from October 2019 until launch in 2021 (assuming that happens).

I think that should be sufficient and probably more than many people will retain for possible use in future. I'm open to any other ideas as well. I think the fact that there are many possible methods of providing proof may stop authorities looking too hard in some cases. I think that they will be busy enough with people without any proof.

[sailbleu]

I really sympathise with the remainers , they were aware of the pitfalls involved of this nasty Brexit . What I ask myself is how the brexiteers feel right now ? According statistics there should be 50% of boaters among them , I personally know a few . In case of a hard Brexit the consequences could/ will be harsh . Would love to hear their take on it now that it seems they bought a pig in a poke .
I believe you can get registered in another EU country Vasco , i’ve read about this trick on facebook somewhere .

Regards

[vasko]

Oct 9, 2020 6:54:40 GMT sailbleu said:

I really sympathise with the remainers , they were aware of the pitfalls involved of this nasty Brexit . What I ask myself is how the brexiteers feel right now ? According statistics there should be 50% of boaters among them , I personally know a few . In case of a hard Brexit the consequences could/ will be harsh . Would love to hear their take on it now that it seems they bought a pig in a poke .
I believe you can get registered in another EU country Vasco , i’ve read about this trick on facebook somewhere .

Regards

Registry in another country is possible of course, but require a lot of other changes and problems...

[alenka]

Good Question Vasko!

Also good to see you survived the Medicane.  In the Ionian around 70 boats did not come out of it well.

As far as I am aware there is no certificate you can apply for to prove your boat was in Europe on the 31st Of December.  Which is a pity because different countries will interpret the ruling differently, as will some Port Police in Greece.

I have onboard;

The original UK VAT paid invoice.

A certified T2L

And the current yard invoice showing that I hauled on the 6th October 2020 and will be relaunched on the 6th May 2021.

Apart from getting a Geo date stamped photo of the boat at midnight on the 31st I don't think there is much else that can be done.


Now that HMRC have reneged on the March agreement to allow British boats to return to the UK without penalty of paying VAT a second time and BoJo is likely to break international law and tear up agreements he made with the EU it is quite possible that the EU may also renege on the concession to allow UK tax paid boats to retain their tax paid status in the EU.

What a Mess!!!

The CA is working with the Greek Ministry to issue a new type of Tax Paid Transit Log which will not be time limited to 18 months. They are also discussing a combined cruising tax/extended stay license to work around the 180 rule.

With regards to HMRC it is likely that the RYA and British Marine (federation) will have to invoke a legal challenge to this 11th hour change of HMRC policy because it is a retrospective penalty.  

In short. HMRC are saying any boat that has been out of the UK for more than 3 years as of 31st Dec 2020 WILL have to pay a second Tax payment.  Their wording uses the term 'Exported' which technically cannot apply to movement within the EU prior to that date. We are still a member up until the 31st December.  Retrospective legislation is specifically mentioned in EU law (which BoJo says will be enshrined into UK law) as an infringement of human rights.

It does however raise the question that if we have unwittingly exported our boats from the UK, so they can charge VAT a second time, then it could also be legally argued that we are able to reclaim (retrospectively) VAT on goods exported.

It is difficult to see that changing the flag/registration of a boat would change its tax paid status.

Many Greeks fly the British Union Jack flag on their boat to try and fool their tax department as to ownership and tax liabilities, they do not understand that this is not the correct flag for a British boat. A red or blue ensign is the correct flag. It won't be long for the Port Police to catch onto this foolery.

[Mistroma]

My brother in law lives in France and sent this link.

www.remaininfrance.fr/noconventionaladdress

I haven't looked at it in detail yet but it seems to cover application for a "Carte de Séjour" for people living on a boat. It might be useful for anyone planning an extended cruise in French waters.

I think that I'm going to end up with a large library of tips, forms, notes and government rules for most of Europe. We will head back to the UK eventually and had planned a very slow trip from Greece visiting Italy, France, Spain and Portugal. I had not bothered with detailed planning because it was very easy on the trip from UK. No real hassle from officials and I could stay anywhere for another season or even sell the boat and return home.

The return trip is going to be much more complicated and I'll need to consider VAT on my return, probably better to sell abroad anyway. Health insurance is going to be much more expensive without EHIC if no deal on that matter.

On the bright side, I'll do as much as I can regarding ownership and have sorted out EU citizenship for myself.

[vasko]

yachtboatnews.com/uk-boat-owners-left-stranded-in-europe/?fbclid=IwAR1dHlf21XxoGjM97l4W2NX_DPvP6-aoCf3keit-SemSMVRvPtXbcb-9Z9s

[jy51]

VAT is Simply a form of taxation , all changes in taxes and their rates are never retrospective and only effect future changes.  Whilst we were members of the EU and our boats VAT was paid in the UK our VAT statues was recognised throughout the EU.  This cannot be taken away from us.  As long as we can prove that the VAT was paid in the U.K. whilst a member of the EU.

However, if we buy a new boat Today and pay VAT in the U.K. this will not be recognised by the EU as the U.K. and it’s tax system has now become nothing to do with the EU and the VAT cooperation between  

This will mean anyone wishing to bring a newly purchased and VAT paid boat from the U.K. into the EU will be classed in Europe As not having paid European VAT and therefore the owner will be required to pay the VAT again.

I would assume this reasoning works both ways.  If you had purchased a boat in Spain, France, Greece or any EU country before Brexit, then there is no reason why the U.K. tax authorities would not recognise the VAT paid status of the boat if you imported it into the U.K.

The way I see it is that the only losers will be those who purchase a new boat in the U.K. and after a period of time wish to keep it outside of the U.K. and within EU waters.

[alenka]

Oct 11, 2020 19:42:27 GMT jy51 said:

VAT is Simply a form of taxation , all changes in taxes and their rates are never retrospective and only effect future changes.  Whilst we were members of the EU and our boats VAT was paid in the UK our VAT statues was recognised throughout the EU.  This cannot be taken away from us.  As long as we can prove that the VAT was paid in the U.K. whilst a member of the EU.

However, if we buy a new boat Today and pay VAT in the U.K. this will not be recognised by the EU as the U.K. and it’s tax system has now become nothing to do with the EU and the VAT cooperation between  

This will mean anyone wishing to bring a newly purchased and VAT paid boat from the U.K. into the EU will be classed in Europe As not having paid European VAT and therefore the owner will be required to pay the VAT again.

I would assume this reasoning works both ways.  If you had purchased a boat in Spain, France, Greece or any EU country before Brexit, then there is no reason why the U.K. tax authorities would not recognise the VAT paid status of the boat if you imported it into the U.K.

The way I see it is that the only losers will be those who purchase a new boat in the U.K. and after a period of time wish to keep it outside of the U.K. and within EU waters.

You need to read the current joint information published by the RYA and British Marine.

HMRC intend to re-charge VAT a second time for owners returning their boats to the UK if they have been away from UK waters for more than 3 years; And apply this ticking clock retrospectively back to 2017.

In March of this year HMRC said all UK boats in the EU waters would retain their VAT paid status when returning.

They declined any further meetings with the RYA and British Marine; but finally gave in on the 14th September where they declared, at that meeting, their change of position.

[jy51]

Oct 12, 2020 9:41:28 GMT alenka said:

Oct 11, 2020 19:42:27 GMT jy51 said:

VAT is Simply a form of taxation , all changes in taxes and their rates are never retrospective and only effect future changes.  Whilst we were members of the EU and our boats VAT was paid in the UK our VAT statues was recognised throughout the EU.  This cannot be taken away from us.  As long as we can prove that the VAT was paid in the U.K. whilst a member of the EU.

However, if we buy a new boat Today and pay VAT in the U.K. this will not be recognised by the EU as the U.K. and it’s tax system has now become nothing to do with the EU and the VAT cooperation between  

This will mean anyone wishing to bring a newly purchased and VAT paid boat from the U.K. into the EU will be classed in Europe As not having paid European VAT and therefore the owner will be required to pay the VAT again.

I would assume this reasoning works both ways.  If you had purchased a boat in Spain, France, Greece or any EU country before Brexit, then there is no reason why the U.K. tax authorities would not recognise the VAT paid status of the boat if you imported it into the U.K.

The way I see it is that the only losers will be those who purchase a new boat in the U.K. and after a period of time wish to keep it outside of the U.K. and within EU waters.

You need to read the current joint information published by the RYA and British Marine.

HMRC intend to re-charge VAT a second time for owners returning their boats to the UK if they have been away from UK waters for more than 3 years; And apply this ticking clock retrospectively back to 2017.

In March of this year HMRC said all UK boats in the EU waters would retain their VAT paid status when returning.

They declined any further meetings with the RYA and British Marine; but finally gave in on the 14th September where they declared, at that meeting, their change of position.

Alenka, Logically can’t see how HMRC can get away with this.

If you have a VAT paid invoice then surely that’s it, you have paid the tax.

Like income tax once paid they can’t just say that because you moved abroad in 2017 and have just returned we want you to pay your 2017 tax bill a second time!  

However I can understand the problem of having to pay import taxes if you wish to return your boat from Europe after Brexit as this would then be no different than if you were bringing a boat into the U.K. from America or anywhere else.

If they are serious about imposing VAT as well then how would they police it, especially if you sailed your boat back from Europe, are they going to check the VAT status of every boat retuning from a weekend in Cherbourg?

[alenka]

These are questions I cannot answer - they are not my personal interpretation or opinion.

HMRC have stated their position officially to the RYA and British Marine, claiming that parliament will have to agree a legal position to stop implementation.

You will need to follow the RYA on what justification HMRC are giving the RYA and British Marine.  The latter claim the move will just about finish off an already very fragile industry with the loss of many thousands of jobs. 

[jy51]

Personal opinions or interpretations aside, you do not pay VAT on a purchase twice and that’s a fact.  

The issue here is one of law and fairness.  The U.K. were members of the EU when these boats we are speaking of were moved to different countries within the EU.  

The UK government wish to ignore this fact and the past 40 odd years of mutual understanding and agreements and class these boats as imports to the U.K. even though they were never exported.

If you wish to know my personal opinion or interpretation relating to this and all the life changing moves that are destroying our relationship with all our neighbours then I’m sorry, but my thoughts go well beyond the boundaries of a sailing forum.

[alenka]

I share your concern!

However, getting mad at people for posting (relaying) information from other sources which you disagree with is counter productive.


"Personal opinions or interpretations aside, you do not pay VAT on a purchase twice and that’s a fact".


HMRC are wanting to bring into play legislation that has been virtually unused for many decades and charge VAT a second time on boats returning to the UK - RYA and British Marine words not mine.

[jy51]

Oct 13, 2020 11:21:30 GMT alenka said:

I share your concern!

However, getting mad at people for posting (relaying) information from other sources which you disagree with is counter productive.


"Personal opinions or interpretations aside, you do not pay VAT on a purchase twice and that’s a fact".


HMRC are wanting to bring into play legislation that has been virtually unused for many decades and charge VAT a second time on boats returning to the UK - RYA and British Marine words not mine.

I’m getting mad at people that relay information, not sure how you come to that opinion!  My only gripe is with the current UK government and there actions in bringing the U.K. out of the EU with what looks, more and more as being without any deal or cooperation.

As you highlighted in italics, I was stressing my frustration when opinions are confused with facts, a problem that seems to be the bases of many Brexit related conversations.  

[alenka]

You have lost me...

People confusing opinion with facts?

Fact. The RYA have been told by HMRC at a meeting held on the 14th September that they intend to charge VAT (a second time) on boats returning to the Uk from Europe if they have spent more than 3 years away from British waters.  This information is to be found on the RYA website.

If you require further clarification please go to the RYA.

[jy51]

Alenka,  I have read this news article about returned goods relief written by a reporter, and much of the article is an opinion, clearly stating “there is a high probability” and “this would mean”. Like all news articles it’s written to provoke and he says, “if you don’t want the risk of having to pay VAT twice”.........Correct me if I’m wrong but no one has actually confirmed that this is the case yet.

The issue is a complex interpretation of the returned goods relief act.

At this stage I don’t even think HRMC know what they will do, but as usual will try to take advantage, it will require a trial case to set a future precedent.

This will all revolve around the interpretation of how goods purchased and taxed in good faith within the EU which included the U.K. retain or loose their tax paid statues after Brexit, and therefore wether or not they come under the RGR like a boat returning from the Caribbean would.

Just another one of the millions of problems that will arise after Brexit, just like our personal lose of freedom to travel and cruise across the Mediterranean. Unfortunately lobbying this government is a waste of time, (as I have mentioned to you before) as their only desire is to distance themselves and us as far away as possible from our European neighbours at any cost to you or I. 

[alenka]

As stated earlier full information and background is on the RYA website.  All you have to do is log in and go direct to the source rather than rely on rehashed newspaper releases. 

[jy51]

Oct 14, 2020 8:30:23 GMT alenka said:

As stated earlier full information and background is on the RYA website.  All you have to do is log in and go direct to the source rather than rely on rehashed newspaper releases. 

Vasko gave the link to this, as you put it (rehashed newspaper article ) that explained the situation, I commented on this article, I thought that was obvious.

It’s kind of you to keep telling me how easy it is to log on the RYA site, as a boat owner you can imaging I have done this in the past!  However, regarding the current situation and any future outcome I have already made my comments and opinions very clear.

This is just another chapter in the slow erosion of cooperation, fairness and human rights that is Brexit.  Personally I think it’s too late for those that chose this path to start complaining now, they got what they voted for.

Next it will be roaming charges, yes the phone companies have promised not to reintroduce charges, but considering they only stopped because of an EU directive banning extortionate charges, once we are out, the temptation to make higher profits under the Tories Policy of low controls will probably see them being reintroduced with a different name.

To many, it was blatantly obvious that leaving the EU would end like this, yet time and time again it was called project fear, well here we are, a reduction of freedom of movement, tax complication, and what’s next, and it hasn’t started yet!

[Mistroma]

Oct 13, 2020 19:28:39 GMT alenka said:

You have lost me...

People confusing opinion with facts?

Fact. The RYA have been told by HMRC at a meeting held on the 14th September that they intend to charge VAT (a second time) on boats returning to the Uk from Europe if they have spent more than 3 years away from British waters.  This information is to be found on the RYA website.

If you require further clarification please go to the RYA.

I attended a Webinar organised by the RYA today. I know some people claim that RYA have the wrong end of the stick and are mistaken in some of their assertions. However, they were clear on their understanding of the following points.

Status of Goods
HMRC appear to have told the RYA that they intend to observe the 3 year limit rigorously wrt the Returned Goods Relief scheme. This seems to have happened with little warning and their previous position was pretty flexible. It also appears that they wanted to use the last date a boat could be proven to be in the UK rather than 31/12/2020.

I can see this being a big problem for anyone who bought a UK owned VAT paid boat in Europe this year with the intention of sailing back next spring.

RYA have already suggested a 3 year transitional arrangement and said that they had just received a reply from the UK Government. It indicated that a 1 year transition period may be possible. Unfortunately, they were not clear about the starting date of the extension. It might be either an extra year from the time a boat left the UK, 3 years from 31/12/22 or 3 years before 31/12/22. I might have picked this part up wrongly as it was still rather vague.

RYA were clear that a boat could lose VAT paid status if rules were not followed on return and VAT would be due a second time. The rules relate to things such as change of ownership, time outside UK and so on.

RYA also confirmed that Barnier's office had said that a UK boat already in EU at the end of this year will retain EU VAT status.

It would be a good idea to check the RYA web-site. www.rya.org.uk/newsevents/news/Pages/RYA-and-British-Marine-joint-statement-on-Brexit-discussions-with-HMRC.aspx

I think that some of this information may not be on the RYA site yet but should be updated fairly quickly. It does seem to be an ongoing process with HMRC or UK Government representatives replying to the RYA's queries and comments.

[jy51]

Mistroma, thanks for the clearer explanation.

When purchasing my new Jeanneau from a UK based dealership my intention was to have the boat commissioned in France and kept permanently in Spain.

Knowing that after Brexit there might be VAT implications, my logical thoughts were; as I had paid the VAT within an EU country (The UK) at the time of construction, it would be accepted and acknowledged as a VAT paid boat after Brexit, while being kept in Spain.  It seems my trust in common sense and the seemingly golden rule that you can’t be asked to pay VAT twice was correct.

“RYA also confirmed that Barnier's office had said that a UK boat already in EU at the end of this year will retain EU VAT status.”

Obviously there is also the complex situation of boats in transit and after Brexit will my boat be classed as an import with local taxes due. Which seems to be the case here with boats returning to the UK from EU member states.

It’s not a simple issue of them charging VAT twice but one of will returning boats attract duties under the RGR scheme. Obviously under this scheme, taxation will include paying any tax that is relevant which might include a portion of VAT based on current value.

Quite a different story than simply implying all returned boats will have to pay VAT a second time.

The RGR scheme relates to boats that were exported out of the UK but as we were in the EU free movement of goods, the HMRC should recognise that returning boats from the EU were not technically exported at the time and accept them as exempt from RGR rules and therefore not liable for double taxation.

A layman’s observation yes, but as I previously mentioned, in all ambiguous taxation issues a test case will need to be fought to set a legal precedent regardless of what HMRC try to do.

[alenka]

Mistroma,

Thanks for the update. Information is coming in from many sources.

It also seems that the RATS section of the Cruising Association are also leaning on HMRC and have secured some direct discussion.

Positive pressure and lobbying by these two groups and perhaps others have already had a 'push back' effect but I guess both are aiming for a return to the position that HMRC stated in March of this year - which everyone at that time considered fair and appropriate. 

Of course both of these organisations rely on the support from *membership. Small membership, no credibility and then it would be down to individuals taking on the HMRC.

*I gather there are around 116,000 fully paid up members of the RYA and 6,500 for CA.