Looking at buying a boat in 2024? Get advice from the professionals to avoid the pitfalls

Surveyor Ben Sutcliffe-Davies looks at the changes since Brexit and advises how boat owners in the UK can avoid the pitfalls

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There is rarely anything better than buying a boat, the prospect of future cruises with family and friends stretching out ahead of you.

But for some buyers, the dream can become something of a nightmare that only becomes apparent when he or she decides to sell their boat.

As broker and ABYA member Chris Ibbotson from boatpoint explains, some sellers have fallen foul when they are unable to produce the title documents for the boat, and therefore unable to prove ownership.

Through the years of Covid-19, boats in the UK exchanged hands rapidly as people tried to make the most of a holiday in British waters.

Many boats were sold privately, sometimes without the correct documentation.

Buy a boat: a yellow boat for sale

Buying a boat: If you plan to buy privately, make sure you have all of the boat’s documentation. Credit: Oramstock/Alamy

“While it might be tempting to sell or buy a boat privately, using a recognised and trained broker can pay dividends and help you to avoid problems,” explained Ibbotson.

“Both British Marine and the Association of Brokers and Yacht Agents (ABYA) provide stringent training for brokers, and a good one will ensure that any vessel will have at least five years clear title (the title documents that prove ownership), evidence of the boat’s VAT status and evidence that the vessel complies with Recreational Craft Directive/Recreational Craft Regulations and CE/UKCA mark requirements.”

An RCD plate on a boat

Most boats are fitted with an RCD plate, which is usually found in the cockpit or just inside
the companionway

The Recreational Craft Directive (RCD) came into force on 16 June 1998. It sets out the minimum technical, safety and environmental standards for boats, personal watercraft, marine engines and components in Europe.

It covers boats between 2.5m/8ft 2in and 24m/ 79ft and ensures their suitability for sale and use in Europe.

Since Brexit on 31 December 2020 the UK has introduced the Recreational Craft Regulations – known as the RCR – which adopted almost all of the regulations in the RCD.

It also announced the UKCA mark would replace the CE mark, although it has since stated that the CE mark will be recognised as proof of conformity with UK regulations indefinitely.

Buying a boat: Follow the money

ABYA brokers will try to establish if any existing loans are outstanding on a vessel.

The director of Promarine Finance, Stuart Austin, says this is not always obvious, but a UK Flag (Part One) Registration (Part 1 of the UK Ship Register) is often a clue that loans have been used to purchase the boat.

“It’s worth knowing that many finance companies will hold the original vessel documents so be aware if just photocopies are being presented to you,” he said.

Vital to buying your next boat is establishing if VAT has been paid on the vessel; if not or if you don’t have proof, it could mean having to pay costly import tax, usually 20% of the customs value of the vessel if importing it into the UK, or the standard VAT rate in the EU country you are importing to.

two women sailing on a boat

You may also need a letter confirming the UK location of your boat on 31 December 2020 as evidence of VAT status. Credit: Richard Langdon

If you are planning to buy a boat in the EU, even if it has a UK VAT invoice, you will still be required to pay VAT again when you bring the boat back to the UK.

In the EU, a British owner can typically keep a boat in EU waters for up to 18 months, with a possible further six month extension, if required, before VAT becomes payable.

Documentation is required to evidence both the entry and exit dates into EU waters.

In the UK, non-UK VAT-paid boats owned by EU nationals can be kept in UK waters for up to 18 months before VAT becomes liable.

It is advisable to keep any documentation, such as marina receipts, to prove where the boat has been, especially if you leave EU or UK territorial waters.

In the EU, you can leave for a minimum of one night before you can return to restart the importation period.

Two men on a boat looking over documentation ahead of buying a boat

Reputable brokers will make sure all parties are kept informed. They will also operate a client account so any money you pay will be kept safe

Remember this only applies to vessels and not people, who may only spend 90 days in any 180-day period in the EU.

Generally, a non-EU resident may buy a new boat in the EU free of VAT, as long as the boat is removed from EU waters within a strict time period, usually 30 days.

After that, the boat will become liable for EU VAT.

Continues below…

If the boat is subsequently imported into the UK, UK VAT will be liable.

If the boat has no CE mark, for example if the boat predates the implementation of the RCD in 1998, then a Post Construction Assessment will be needed by a UK body approved by UK regulations.

HPi Verification Services is the only UK-Approved Body for recreational craft. For EU residents buying a boat in the UK and taking it back to Europe, VAT/TVA (EU VAT) is now payable regardless of any previous VAT status in either the UK or Europe.

Buying the right boat

When deciding on what boat to buy, think about the type of boating you are planning to do and who you are doing it with.

Will you be sailing short-handed? Will you be sailing with family or young children? Do you plan to cruise the coast or cross oceans?

A good broker will be able to point you in the right direction and could save you money and time, especially if it becomes obvious the craft and your aspirations don’t match.

A woman sitting on a boat

Buying a boat: If you build your own boat and sell it within five years, it will need a an RCD/RCR certificate. Credit: dpa picture alliance/Alamy

A broker should be experienced enough to help guide and suggest other craft that may be the perfect boat for you.

Remember, never make an offer on the boat until you have seen it.

A reputable broker will use an industry-recognised approved contract, such as ABYA’s, that both sides should sign before any survey is undertaken.

A yacht with a blue hull and red sails

Boats built and put into service before June 1998, like this Victoria 30, do not need an RCD certificate. Credit: Richard Langdon

It’s important to talk to a few surveyors and not just jump immediately to the cheapest or the only one that happens to be available that week!

It’s recommended to use surveyors who are members of professional associations, such as the Yacht Designers & Surveyors Association (YDSA), The International Institute of Marine Surveying (IIMS) or The Society of Consulting Marine Engineers and Ship Surveyors (SCMS).

Check their membership level and do not hesitate to ask for sample surveys.

A Registration Certificate can help prove boat ownership when you buy a boat

A Registration Certificate can help prove boat ownership

The broker should be able to assist in ensuring that the owner has prepared the boat for survey.

If the vessel is afloat, the broker will arrange for a lift out, and can organise sea trials.

A good broker will make sure all parties are kept informed and negotiate to ensure the sale goes through, without a clash of personalities causing it to fail.

The documentation you need when you buy a boat

Before listing a boat for sale, a good broker will look to establish the history of the boat and provide the buyer with a full and comprehensive file of documents to ensure a clear title is passed.

A signed and stamped Single Administrative Document

A signed and stamped Single Administrative Document (C88) could be used as evidence of VAT status. Credit: Theo Stocker/YM

These include:

  • Evidence of RCD/RCR status – this will be in the form of a Declaration of Conformity (often found in the owner’s manual) and an RCD plate, usually found in the cockpit or just inside the companionway. Arguably this is the most important document, as without it, it’s possible that a broker cannot legally sell your boat.
  • Evidence of five years clear title – this will be one or a multiple of Bills of Sale going back at least five years.
  • Evidence of VAT status – this could be the original purchase invoice, a letter from HM Revenue and Customs (HMRC), or an HMRC-issued C88 document
  • Evidence of its registered status – is the boat on the Small Ships Register (SSR) or Part One Registration (UK Ship Register)? Did you know a Part One registered boat is often the first sign there may be an outstanding mortgage? The broker will be able to check with the Registry and confirm.
  • Evidence of where and when the boat was built – the Builder’s Certificate

Often some of the documents are missing or not available; a good broker will use all the resources at their disposal to build a history of the boat to give the buyer the confidence to know they’ll be getting a clear title with no debts or liens.

What if you don’t have proof? Chris Ibbotson from boatpoint has answers!

  • I have no title documents for my boat, what do I do? This has become increasingly problematic since the flurry of boat sales during Covid-19. The first question a broker would ask is why? Were you never given them? Have you lost them? First, you should go back to the vendor or broker and ask for the documents. If it was through a broker, he or she will have copies. If it was a private sale then it’s more complicated. Do you have other documents that can support your claim that you own the boat, such as a Registration Certificate in your name, insurance documents, mooring receipts, receipts for engine servicing etc? Although these don’t prove you own the boat, they help build a picture. If no title documents are available some brokers will accept a signed statutory declaration witnessed by a solicitor, stating that you are the legal owner. Why is this important? To start with a good broker needs to establish if the boat can be legally sold. How do we establish who really owns it, how do we know it hasn’t been stolen, or if one half of a divorced couple is selling it without the consent of the other? One option, if the boat is registered either in the Small Ships Register (SSR) or Part One Registration (UK Ship Register), is to request a historical transcript. Depending on the age of the boat and when it was first registered, we may be able to establish the lineage of ownership up to and including the current owner.
  • What happens if the boat is a DIY build/kit boat? You’ll need to provide the buyer with a history of the build so the age of the vessel can be verified, and receipts for the work must be obtained to evidence that VAT has been accounted for during the build. If sold within five years of completion, a home-built boat will require an RCD/RCR certificate.
  • My boat was built before the RCD came into effect. What impact will this have when I sell it? If your boat was built before and put into service before June 1998 and has remained in the UK then there is no requirement for a RCD certificate.
  • Where can I find proof that my boat complies with the RCD/RCR? If your boat was built or imported into the UK or EU after June 1998 then it will require an RCD/RCR certificate. The Declaration of Conformity is often found in the owner’s manual, it is similar to a builder’s certificate and has the hull number on it. Your boat will also be fitted with an RCD plate, usually in the cockpit or just inside the companionway. Without these, it may not be possible to sell your boat without first obtaining a Post Construction Assessment (PCA), which can only be certified by a notified body – which is HPi Verification Services in the UK.
  • I have no UK VAT documentation. What can I do? Unfortunately, there’s very little you can do if the VAT documentation is missing. Your broker will try to track the history of previous sales and hope to obtain a copy held by another broker. Without a VAT invoice or other evidence of its VAT status, buyers may consider the boat to be a financial risk and walk away or look to make an offer lower than the asking price to negate any potential losses. A broker will inform the buyer of the documents held and it will be written into the sale and purchase agreement.
  • I have no EU VAT documentation. What can I do? See above.
  • How can I prove that my boat was in the UK/EU on 31 December 2020? A letter from a marina, a boat yard, or sailing or motor boat club on their headed paper will suffice, a letter from your mate Dave to say it was in his garden isn’t good enough! To summarise, buying a boat privately is relatively easy, but to buy a boat that doesn’t put you at risk at a later date is more nuanced. A sale completed by a good broker will give you the peace of mind that when it comes time to sell, it will be a much simpler process and you will likely achieve a better price because you have all the correct paperwork.

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