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Proving VAT status of an old boat

Razorfish

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4 May 2004
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Up a creek....
I am helping sell a boat for a friend who's father has passed away. It was built in the late 70s but nearly all of the paperwork associated with the vessel has long been lost during the owners nomadic life. He has a buyer in Greece who is keen to complete but requires proof of VAT status beforehand. Assuming that this is not a very unusual situation, do any of the forumites have suggestions of how they solved the problem?

Many thanks in advance.
 

BlowingOldBoots

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Scotland.
You can't. Without a VAT receipt there is no proof of VAT paid. However, if you can prove that the vessel has been in the EU since 31 December 1992, through marina receipts, for example, or other paper work, then maybe an affidavit could be drawn up stating that the vessel is considered VAT paid due to it's age and continual presence in the EU since that date.

Some information here on boats and VAT in the EU: -

The VAT problem: top tips for yacht buyers and owners

Some customs authorities may be prepared to look at the documentation available (and therefore any available receipts or log books should be kept) and may issue a letter of comfort that they yacht is considered by them as VAT paid. However, this is unusual and not a practice that is followed in the UK. In any event, such a letter is not proof that VAT is deemed paid. In respect of yachts build before 1 January 1985 and in the EU at midnight on 31 December 1992 such documentation and requests for a letter of comfort should be submitted to the customs authority in the country where the yacht was on 31 December 1992.
 

Tiderace

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28 Apr 2019
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52
Our lovely HM Customs stopped making VAT declarations for boats I think in 1992. They are government employees but don't work for the likes of you or I! There is a letter of such; I've a copy on my boat which goes on to state that in the absence of that declaration you either need a) proof of purchase and VAT from original purchase. For an 70s yacht, very unlikely, b) proof the vessel was in the UK on the magic date of 31st December 1992 (I think that date is correct), again very unlikely you will have this. and c) there is a third bit of proof but I cant recall what it is of the top of my head.

For a boat of that vintage all very difficult to prove. I bought a 1979 from Holland and had to go for a "defence in depth" approach as we had none of the specific pieces of paper, so we got 1) copy of builders certificate from the manufacturer stating it was built in an EU country and the first owner was in the EU, 2) a letter from a previous owner declaring it was in the UK on the magic date and c) an invoice and declaration from the guy I bought from that it hadn't been used commercially and was VAT paid. I've also gotten it registered on the Small Ships Register, whilst this doesn't prove anything, has been enough when we have been stopped by foreign customs people.

Good luck. If you need a copy of the HM Customs letter let me know; I'll be onboard next week and can take a pick. RYA website should also have some details.
 

RichardS

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5 Nov 2009
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Home UK Midlands / Boat Croatia
I applied for, and received, a T2L certificate from HMRC for my boat which satisfies Croatian customs that tax has been paid ... or something like that. Have a look at the RYA website and see if a T2L might work for you. It's all nonsense really but it was free so why not? :)

Richard
 

Stemar

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I guess the honest way would be to assume the buyer will have to pay VAT and discount the price appropriately.

I couldn't possibly recommend a few minutes in Word or similar to produce a suitable receipt showing VAT paid or a marina/mooring receipt covering the new year 1992-3 ...
 

Razorfish

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4 May 2004
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217
Location
Up a creek....
Thanks for your good advice and information everyone. I'll look at the T2L certificate Richard. I think that Stemar has read my mind already - the vessel is being sold for a very good price and I have recommended that the buyer consider this already.

Life's too short to mess around with this sort of thing!
 

TernVI

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8 Jul 2020
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2,604
I am helping sell a boat for a friend who's father has passed away. It was built in the late 70s but nearly all of the paperwork associated with the vessel has long been lost during the owners nomadic life. He has a buyer in Greece who is keen to complete but requires proof of VAT status beforehand. Assuming that this is not a very unusual situation, do any of the forumites have suggestions of how they solved the problem?

Many thanks in advance.
Is the boat in Greece?
Has it been in Greece a long time?
 

CLB

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18 Jun 2013
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4,749
I guess the honest way would be to assume the buyer will have to pay VAT and discount the price appropriately.
This just gives the buyer an unnecessary discount. The private sale of a boat between two EU citizens is not a VATable transaction. Moving a used boat between EU countries is also not a VATable transaction, if the sale between private individuals takes place within the EU. All this might change after December, but at this time I would tell the buyer to 'jog on' if the price as it currently stands is fair and reasonable.
 

Frogmogman

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Just print your own up. Who's going to check it out? :)
I really wouldn’t recommend that. If you were caught out you could be charged with fraud.

The Naval attaché in Paris a few years ago got caught out putting in faked expenses invoices; he had miscalculated the VAT on one of them and a bean counter at the MOD tried to call the made-up hôtel to get it put right. Drummed out of the service in disgrace over a few hundred quid and convicted of fraud. An ignominious end to what had been a stellar career.
 

CLB

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I really wouldn’t recommend that. If you were caught out you could be charged with fraud.

The Naval attaché in Paris a few years ago got caught out putting in faked expenses invoices; he had miscalculated the VAT on one of them and a bean counter at the MOD tried to call the made-up hôtel to get it put right. Drummed out of the service in disgrace over a few hundred quid and convicted of fraud. An ignominious end to what had been a stellar career.
That’s quite a different scenario. The attaché was trying to defraud his employee and was, rightly, hauled over the coals.
There is no fraud here. Just someone replicating a long lost piece of paper to satisfy some official who, in reality, has little moral right to demand it.

if you go go down this route, make sure you use a proper VaT number. A completely made up one will quickly show as such on any basic VAT number checker 😮
 

Frogmogman

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That’s quite a different scenario. The attaché was trying to defraud his employee and was, rightly, hauled over the coals.
There is no fraud here. Just someone replicating a long lost piece of paper to satisfy some official who, in reality, has little moral right to demand it.

if you go go down this route, make sure you use a proper VaT number. A completely made up one will quickly show as such on any basic VAT number checker 😮
I’m sorry, but there is fraud in this example. Without the relevant paperwork, the boat could be liable for VAT. If the forgery came to light, the new owner could find himself liable to pay one fifth of the value of a boat he had bought in good faith on the basis of the documents provided, so it is not negligeable. Were that me I would come after the vendor.

Tory MP Chris Davis was convicted of forging two invoices for some photographs he had bought for his office, and which he was entitled to claim back. Because there were inadequate funds remaining in his office setting up fund, he needed the invoice splitting in two, so he could pay the balance out of a different fund. Instead of asking the photographer to re-do the invoice, he knocked up a couple himself.

18 month suspended sentence IIRC, and had to step down. He had spent the money, he was entitled to claim it back. It still didn’t make the false invoices OK.
 

duncan99210

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Winter in Falmouth, summer on board Rampage.
The real,problem lies with the end destination of the boat. It is being sold to a Greek national and will therefore need to be placed on the Greek register. Unlike the UK registers, the Greeks require evidence of vat having been paid, hence the concern. I’m not sure that the T2L would meet this requirement, as it’s aimed more at proving a degree of cover for a boat in the EU on the UK register.
Whilst some creative paperwork might be OK for cruising, for getting on to the Greek register it will leave the buyer open to a world of trouble if discovered.
 

CLB

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I’m sorry, but there is fraud in this example. Without the relevant paperwork, the boat could be liable for VAT. If the forgery came to light, the new owner could find himself liable to pay one fifth of the value of a boat he had bought in good faith on the basis of the documents provided, so it is not negligeable. Were that me I would come after the vendor.

Tory MP Chris Davis was convicted of forging two invoices for some photographs he had bought for his office, and which he was entitled to claim back. Because there were inadequate funds remaining in his office setting up fund, he needed the invoice splitting in two, so he could pay the balance out of a different fund. Instead of asking the photographer to re-do the invoice, he knocked up a couple himself.

18 month suspended sentence IIRC, and had to step down. He had spent the money, he was entitled to claim it back. It still didn’t make the false invoices OK.
Fraud: intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.

If VAT was liable, and someone knocked up a pretend VAT invoice to try and avoid it, I agree it would be fraud. In this case, unless the OP is not telling us something, there is no VAT liability, therefore no fraud.
 

Stemar

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If VAT was liable, and someone knocked up a pretend VAT invoice to try and avoid it, I agree it would be fraud. In this case, unless the OP is not telling us something, there is no VAT liability, therefore no fraud.
A Greek court may decide that, without proof to the contrary, VAT is payable, so definitely fraud. ISTR that Greece had a system whereby tax for those of moderate incomes was considered voluntary, at least by those of moderate income, and part of the Greek efforts to get out of the hole that put them in is to change that. A sense of humour regarding tax matters may therefore be lacking. For wandering around the UK and the odd trip abroad to Cherbourg, I'd be quite happy to knock up a document, but time in a Greek jail is something I'd rather avoid.
 

GHA

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Fraud: intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.

If VAT was liable, and someone knocked up a pretend VAT invoice to try and avoid it, I agree it would be fraud. In this case, unless the OP is not telling us something, there is no VAT liability, therefore no fraud.
What some bloke on a web forum says is legal and a guy on a Mediterranean pontoon with a uniform in a grumpy mood says is legal can be very different...... risking it is *really* stupid imho.
 

CLB

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A Greek court may decide that, without proof to the contrary, VAT is payable, so definitely fraud. ISTR that Greece had a system whereby tax for those of moderate incomes was considered voluntary, at least by those of moderate income, and part of the Greek efforts to get out of the hole that put them in is to change that. A sense of humour regarding tax matters may therefore be lacking. For wandering around the UK and the odd trip abroad to Cherbourg, I'd be quite happy to knock up a document, but time in a Greek jail is something I'd rather avoid.

I get all that, but if there is no VAT liability, there is no fraud. I don't know how the greeks and suddenly 'decide' that there is a liability. what proof could they possibly come up with to determine that VAT is liable?
 

TernVI

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I get all that, but if there is no VAT liability, there is no fraud. I don't know how the greeks and suddenly 'decide' that there is a liability. what proof could they possibly come up with to determine that VAT is liable?
There is a fraud, because the seller would be misrepresenting the boat as having proven VAT paid status, when in fact it has unknown VAT status.
The value to the buyer is less because he is either taking a risk or faces a certain amount of work to obtain the VAT paperwork.
If they proved that the VAT receipt was a forgery, then you'd be creating a VAT liability.

Sane people will pay more for a boat with all the right paperwork. How much more is a question, it might not be much, just the value of a few hours work to obtain a T2L, or it could be a big amount.
Note that the issue is not just VAT, it is potentially import duty or even the boat being ineligible to be imported to the EU due to emissions or RCD.
There are boats knocking around the Med which have changed hands in e.g. Turkey and do not have the status of 'Union Goods'.

There are also, allegedly, some dodgy characters trying to flog some of these boats, saying they are acting for e.g. the estate of friends or relatives.

Buyer Beware.
 
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