What are the Brexit VAT implications of keeping my boat in France and the UK?

We want to buy a secondhand boat that is currently registered and located in France, and owned by a EU national.

If we bring it into the UK and register it here, we will have to pay VAT on the import, even though it is already Value Added Tax (VAT) paid in the EU.

Ideally we would like to keep the boat in the UK throughout the sailing season, returning to France for servicing and for winter storage.

If we were to keep it registered in France, returning from the UK to France for servicing, would that mean it would not be liable for UK VAT?

If so, how long would we be able to keep it in the UK before it became UK VAT liable?

How long would French customs allow the boat to be kept out of the EU before it became liable for EU VAT?

Tasha Green

Answer

The chair of the Cruising Association’s Regulations & Technical Service group, Robin Baron responds:

Tasha’s plan to toggle between France and the UK does not work well from a VAT perspective for this particular vessel.

Assuming that VAT was paid upon first sale by the manufacturer within an EU country then the boat is VAT paid in the EU but not the UK.

If Tasha is resident in the UK then UK VAT arises as soon as the boat enters the UK.

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It would be calculated on the current value of the boat at the date of import.

Robin Baron is chair of the Cruising Association’s Regulations and Technical Services group. Credit: Robin Baron

Temporary admission into the UK is not available for UK residents.

There are no exceptions for servicing and maintenance unless the boatyard has a separate customs secure area; in the UK very few do.

In relation to France or other EU countries you should be able to claim Returned Goods Relief (RGR) upon the boat’s return to the EU subject to meeting the following conditions:

(a) during its period of export, the vessel must not have had more than “running repairs” to it that do not increase its value;
(b) the goods must be returned to the EU within three years or, if outside the three-year period, there are “special circumstances”
to justify the waiver of the three-year rule; and
(c) the person importing the goods is the person who originally exported them.

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