If you are buying a second hand boat and the seller is VAT registered then VAT may be due on the sale price.

Vat on second hand yachts. Confusion over the EU VAT status of second hand boats following Brexit has led to leading marine bodies in Europe and the UK collaborating to issue new guidance. Yachts must carry their original registration document insurance policy and ships radio license. Boats built after 1 January 1985 should have had VAT paid by the first owner or importer and evidence of this should come in the form of a VAT certificate or invoice.

VAT on yachts can add a hefty amount to the price tag. And thats just the beginning of all the details to consider. Which Boats Should Have Had VAT Paid on Them.

Buying a used boat is similar to buying a used car - vat is only paid on the boat when new then it is vat exempt. If the buyer is a foreign company and is entitled to deduct the VAT the tax must be paid in the country in which the yacht will be registered. The general rule in the UK is that if the yacht has increased in value since the date of purchase by the seller VAT will be due on the amount by which the value has increased even if VAT was previously paid on the purchase of the yacht and has not been reclaimed.

This boat is being sold. Before committing to buying a second hand boat its important to ensure the VAT paperwork is available or that the price reflects the lack of documentation. My client seems to think that there should be no VAT charged on the sale of the boat because they didnt pay VAT on it initially but as a VAT registered business I believe they should be charging VAT on this as it is a supply of goods.

The EU Commission has said that yachts located in the UK at the end of the transition period on which VAT. Things are progressing but evidence is still needed. Yachts located in the EU at that time will keep Union status and continue to be regarded as being VAT-paid for travel throughout the EU.

Ultimately VAT duty falls on the current owner so it is imperative that you receive the right paperwork before buying a second hand boat. A consortium of British and European marine organisations including the RYA and British Marine has published a set of eight scenarios to help boat owners unravel the complexities of post-Brexit VAT status on second-hand boats. VAT on boats when buying second-hand The Association of Brokers and Yacht Agents ABYA recommends that its members should obtain the relevant paperwork from the vendor before listing a yacht as being VAT paid.