1981 westerly , uk boat, tax status

[westerlylad]

Hello all,

Can anyone comment on why my 1981 Westerly, which has never been out of the UK, would not be deemed tax paid?

Thanks in anticipation.

 

[RunAgroundHard]

If the boat had been purchased as part of a business and VAT not paid, or VAT reclaimed by the business, it could put the boat in a position where VAT has not been paid.

 

[westerlylad]

Thank you Run Aground. The boat was first sold, in the 1980's by Westerly, to a private individual and subsequently, over the years, to several other private individuals, and eventually, to me!

I'd have thought that this was a simple case of deemed tax paid.

 

[Tranona]

Thank you Run Aground. The boat was first sold, in the 1980's by Westerly, to a private individual and subsequently, over the years, to several other private individuals, and eventually, to me!

I'd have thought that this was a simple case of deemed tax paid.

Yes, by virtue of being pre 1986. No different from thousands of other old boats (like my 1979 one)

 

[westerlylad]

Thanks Tranona.

That's what I would have thought. But I just wondered why some 1980's uk boats are listed as tax paid, some as tax deemed paid and and some as tax not evidenced.

 

[Tranona]

Thanks Tranona.

That's what I would have thought. But I just wondered why some 1980's uk boats are listed as tax paid, some as tax deemed paid and and some as tax not evidenced.

Because all can be a reasonable explanation. Anyhow it is all totally irrelevant. Nobody least of all "authorities" are in the least bit interested in the VAT status old boats in the UK. The term "deemed VAT paid" is directly from the accession rules in the Lisbon Treaty in 1992.

 

[westerlylad]

I agree with you Tranona. but if we are correct in the assumption that nobody, including HMRC, will ever be interested in the tax status, why do brokers insist on stating it for older boats in their listings?
Surely all this does is cause confusion and alarm prospective purchasers!

 

[davidej]

I agree with you Tranona. but if we are correct in the assumption that nobody, including HMRC, will ever be interested in the tax status, why do brokers insist on stating it for older boats in their listings?
Surely all this does is cause confusion and alarm prospective purchasers!

Could it be to distinguish them from old boats that had spent lots of time resident abroad and thus might have suspect VAT status?

 

[Tranona]

I agree with you Tranona. but if we are correct in the assumption that nobody, including HMRC, will ever be interested in the tax status, why do brokers insist on stating it for older boats in their listings?
Surely all this does is cause confusion and alarm prospective purchasers!

Just part of the template they use for descriptions and dates from the time when we were in the EU and having evidence of VAT payment was considered important if you took your boat to Europe. Brokers were encouraged to advise prospective buyers of VAT status. It is a complicated subject surrounded by many myths and in some cases it is really important to be precise about the status of a particular but for the vast majority particularly for older boats it is irrelevant.

 

[westerlylad]

Thanks Tranona and davidej for your comments.

I'd like to read the RYA commentary on this subject, but I think I may need to join up to get access to it!

 

[Tranona]

Thanks Tranona and davidej for your comments.

I'd like to read the RYA commentary on this subject, but I think I may need to join up to get access to it!

Not sure they have commented on it other than informing members of changes over the years to the VAT environment, particularly since Brexit. However it has mostly been about explaining new rules and how they affect boats and people in particular situations. The way brokers describe VAT status is broadly correct and for the vast majority of people and their boats it is a non issue.

If you hang around here you will find VAT problems come up regularly and the most common themes are lack of evidence of payment (again mostly a non issue as with your boat and mine), status of individual boats particularly since Brexit which created "EU Paid" and "UK Paid" based on location of the boat on 31/12/2020 and moving boats in and out of distinct customs areas which often requires an understanding of the rules related to exemptions.

 

[westerlylad]

Thanks again Tranona. Is there is a particular difference between a 1970's UK boat that has never been out of the UK (broker says 'tax not applicable') and my 1980's boat, also never out of the UK (tax status not evidenced)?

 

[ithet]

Thanks again Tranona. Is there is a particular difference between a 1970's UK boat that has never been out of the UK (broker says 'tax not applicable') and my 1980's boat, also never out of the UK (tax status not evidenced)?

VAT came in during 1973. My father ordered a boat at the boat show just before, which was delivered after the VAT date. There was an argument with Tax authorities as to whether VAT applied. The result was it did not due to the date of order.

 

[Tranona]

VAT is due when the transaction takes place - that is the point of invoice. The "tax not applicable" is really a bit of nonsense although strictly speaking it applies to all transactions between private individuals and could also apply to pre 1973 boats (and some later due to certain specific exemptions) but is actually meaningless from the point of view of VAT status. In reality 99.9% of used boats on sale in the UK have VAT paid status. The potential exceptions are boats being sold by a VAT registered entity, for example a charter operator or boats that have spent time outside the UK and have returned or boats that are first time imports from outside the UK.

 

[westerlylad]

Thanks ithet and Tranona and all who contributed.

I feel a bit more informed now than I was at the start!