Why did I get stuck in VAT limbo?
QUESTION OF THE MONTH
QI bought a previously Swissowned boat in 2006. Her owner had sailed across the Atlantic from La Rochelle to avoid paying VAT. On her return she called into the Azores and then Ireland before being left at Nieuwpoort, Belgium, to be sold. I knew that VAT would be due at time of sale and that I had to pay it.
UK Customs & Excise told me they needed the bill of sale from me while the boat remained in Belgium, but later said I should bring the boat to the UK. Back in Dover, however, I was told by Customs and Excise (Vehicles) that the tax was due in the boat’s first port of entry to the EU. I went all round the houses for months, and by then I was ready for my trip to the French canals, for which I had bought the boat. I emailed the French authorities to let them know what I was doing, but got no response. Finally, after a two-year struggle, my accounts were finally If your boat hasn’t had VAT paid, you’ll need to let HMRC know accepted by UK Customs. I am still no wiser as to where things went wrong and why it took so long. Any light you can shed on it would be appreciated.
ALorna Irvine, HMRC pleasurecraft officer, replies:
A non-VAT paid vessel can sail around the EU for up to 18 months on Temporary Admission, visiting as many European Union ports as it wishes and not being liable for VAT in those 18 months. After this time the owner can apply for a six-month extension or import the boat permanently and pay the VAT at the first port they arrive in after the Temporary Admission expires.
I can only assume that when Mr Highnam arrived in the different ports he was within the 18 or 24 month temporary admission period and therefore classed as a visitor and was allowed to proceed.
Dover HMRC deals only with car imports and new vessels arriving from other EU countries, so I can understand why they would have advised your reader that they could not help. They should, however, have referred them to us at the the UK Pleasurecraft team, who could have assisted him with the VAT payment. We are able to deal with all VAT or duty related enquiries and payments for British yachts: pleasurecraft.lcsouth@hmrc.gsi.gov.uk