A sad VAT story

[Guest]

Why not sail to Guernsey (no VAT) get a local valuation from a broker here and then sail back to UK to import the boat on the basis of that valuation. I did this about 15 years ago - paying the VAT in Brighton Marina.

Alternatively get the new owner to take delivery in Guernsey and he can handle the VAT how he pleases when he returns home.

<hr width=100% size=1>

 

[extravert]

> The point to bear in mind is it's not you who needs to prove the VAT status - it's your buyer.

This doesn't stand up in reality. Any purchaser aware of VAT on boats is going to ask for VAT status, and if it is not forthcoming, is either going to ask for a price reduction or is going to walk away. They would be foolish not to. This then places the VAT proof burden on the vendor, like I have just found.

Your second point is an interesting one. The guide says 'As Sweden, Finland and Austria joined the single market 2 years later, the relevant dates will be in use before 1/1/87 and moored in the EC on 31/12/1994'.

For the second part (where moored on 31/12/94) it is explicit on location, ie anywhere in the EC. For the first part (in use on 1/1/1987) it leaves the reader to guess what location applies. Does this mean that the boat can be in use anywhere in the world on that date, and the boat is deemed VAT paid (assuming you can meet the second part) in Sweden, Finland and Austria, or does it mean that the boat must have been in use in Sweden, Finland or Austria on 1/1/87?

If the former, then if I can find proof of location on 31/12/94 in the EU, then I have a deemed VAT paid boat for Sweden, Finland and Austria only. The Swedish purchaser would have a boat limited to these areas for VAT paid status. This sounds rather inconvenient for him, and a problem when selling again. If the second interpretation is correct, I am no further on, as I have no proof that the boat was in use in Sweden, Finland or Austria on 1/1/1987, because I don't expect it was.

<hr width=100% size=1>Adventures of the VAT unpaid <A target="_blank" HREF=http://www.xrayted.fsnet.co.uk>Teddy Bear Boat</A>

 

[extravert]

I would certainly start some investigations. You are unlikely to have a problem during your ownership, unless you meet a zealous French customs officer with not much to do, but you are likely to have problems if you try to sell the boat.

<hr width=100% size=1>Adventures of the VAT unpaid <A target="_blank" HREF=http://www.xrayted.fsnet.co.uk>Teddy Bear Boat</A>

 

[extravert]

The only person in the UK who would buy a boat from someone else in the UK with no proof on VAT paid or deemed VAT paid status is someone who does not know the VAT rules (like I didn't 5 years ago).

I would have to find un unknowledgeable UK buyer privately, because no broker would sell a boat in the EU with no VAT proof status, unless they were dishonest and on the verge of going out of business, like the broker I bought the boat through.

Unfortunately the X99 is a reducing class in the UK, it never reached critical mass here, although it goes from strength to strength in Scandinavia with nearly 1000 boats built. Every one sold here goes abroad. I have had 13 enquiries, all from Scandinavia. When prospective purchasers make enquiries from delivery companies, one of the first things they get told is get VAT status documents. International delivery companies seem to be aware of the situation. They will not even consider a boat delivery without correct documentation. I found this when making enquiries for the delivery of my new boat from Sweden. I guess it only takes a driver to be held up once at a ferry port for them to learn the rules the hard way.

<hr width=100% size=1>Adventures of the VAT unpaid <A target="_blank" HREF=http://www.xrayted.fsnet.co.uk>Teddy Bear Boat</A>

 

[Gunfleet]

One can only feel sorry for your predicament - but what a mess these rules are! My boat is 30 years old and I have the original blue registration document, but that comes nowhere near offering the sort of proof you say they require. Britain must be chock a block with boats which can't prove their status - in fact I reckon according to these rules, more boats can't prove their status than can!

<hr width=100% size=1>

 

[extravert]

Yes, I agree with you totally. The rules are real mess and designed by someone who obviously doesn't own a boat. I also agree that the EU is probably full of VAT dubious boats, and certainly the UK part of HMCE who deal with boats, planes and cars (the PTU in Dover) just don't want to help. I have owned and sold boats before with no VAT docs and had no problems. It seems suddenly to have come to people's awareness recently.

The reason why I publicised my story here is because I know there are many readers on this forum who are considering buying boats. It's too late for me, but I want prospective new buyers to be aware of the situation, and not to get caught out like I was. For existing boat owners, I have probably scared a few. All I can say is start searching for evidence now. Don't leave it until you try to sell.

<hr width=100% size=1>Adventures of the VAT unpaid <A target="_blank" HREF=http://www.xrayted.fsnet.co.uk>Teddy Bear Boat</A>

 

[AndrewB]

\"Copies will not do\"

Why do you think that?

The advice given in HMCE Notice 8 states: "EU residents should only use a vessel in the Community if it is VAT paid or 'deemed' VAT paid. Documentary evidence supporting this should be carried at all times as you may be asked by customs officials in other Member States to provide evidence of your vessel's VAT status." Although the example given is the original invoice, copies are not specifically excluded.

If you are right, it is an additional problem for yachts that have only copy invoices.

I have not heard of problems with EU customs regarding copies of VAT evidence, in the way there has been for yachts carrying only copies of their registration documents.

<hr width=100% size=1>

 

[extravert]

Re: \"Copies will not do\"

UK Guide for Yachts from HMCE is explicit. It says...

'Original invoice or receipt'

On one of the rare occasions when someone from the PTU actually answered the phone I confirmed the meaning of this, and was told that copies are not acceptable.

This is the same as for registration documents where the original must be carried. At least it seems that someone from the MCA has actually been on a small boat on a damp day, and they helpfully laminate a SSR document for us.

<hr width=100% size=1>Adventures of the VAT unpaid <A target="_blank" HREF=http://www.xrayted.fsnet.co.uk>Teddy Bear Boat</A>

 

[Gunfleet]

implied status?

I just looked up which papers French boaters ought to carry in the Cours des Glenans. No mention of a VAT receipt, but you should carry the acte de franchisisation or the permis de circulation. I wonder if other European countries' ownership documents don't imply the vessel is accepted as having VAT paid status? Maybe our Dutch or Scandinavian posters would comment.

<hr width=100% size=1>

 

[vyv_cox]

Re: \"Copies will not do\"

Andrew, I hope you are correct. My boat was launched in 1985 so just crosses the boundary between the "old" and the "new" so far as customs and VAT seem to be concerned. We are either the third or fourth owners.

We have photocopies of the receipts of the original stage payments on Sadler Yachts headed paper with their VAT registered number, clearly stating the proportion of payment that is attributable to VAT. However, the originals are long gone. I have wondered about trying to get HMCE to rubber stamp them as agreeing that the VAT had been paid but I don't see any other options available. I think I have read here of cases where French authorities fined owners for not being in possession of original VAT statements and purchase receipts.

<hr width=100% size=1>

 

[petery]

Re: Print one yourself...

You are right of course.

My situation is different - I have a part 1 registration showing the boat is 25 years ols and all I have to do is prove the boat was in the UK on that magic date.

<hr width=100% size=1>

 

[Heckler]

Re: Print one yourself...

your quite right peter, play the tossers at their own game,
stu

<hr width=100% size=1>

 

[Observer]

Original or copy invoice

You're unlilkely to get any answer on the 'phone other than the one written in published advice.

It is of course ludicrous of C&E to say that "copies are not acceptable" as though an original is the exclusive determinant of whether or not a boat is VAT paid. A copy invoice is no more or less good than the original as long as it identifies the boat (by H.I.N. ideally) and has the other legally required particulars of a VAT invoice (identifyimg number, name, address and registration number of supplier, date, tax point (if different), name and address of customer, type of supply, amount and rate of VAT included in the invoice value).

An invoice is not "proof" of VAT status, only evidence. Whether or not a boat is VAT paid is a matter of fact: (i) has output tax been charged by a VAT registered person in the EU; or (ii) if the boat was imported from outside the EU was it declared and VAT paid on entry; or (iii) does the boat qualify as "deemed VAT paid" under any applicable transitional arrangements. A full VAT invoice is evidence (excluding fraud) of (i) above.

What is probably true is that where the invoice does not precisely identify the boat, or the boat has a different owner to the one named on the invoice, an original invoice will offer more persuasive evidence that boat and invoice are "matched".

So, if one has bought a boat and received only a copy invoice from a previous owner, which doesn't identify the boat, it could be helpful to contact the supplier and ask if he will provide a letter confirming that "the boat supplied under invoice number xxx has H.I.N. yyy".


<hr width=100% size=1>

 

[Observer]

Doesn't matter where the boat was as long as it was "in use" before 1/1/87. If the location was relevant (on that date), it would be stated. If it had to be in Sweden, Finland or Austria, there would be no need for the double qualification.

The point about whether the boat would become "non-VAT paid" if it was subsequently sold outside Sweden, Finland and Austria is interesting and I don't know the answer. On one hand, I don't see how the VAT status can change from one EU country to another unless the ownership has changed outside the EU. On the other hand, if that is true, it does seem to open the possibility that a boat not qualifying under the transitional arrangements in (say) the UK could be "laundered" through (say) Sweden.

I suspect there is not a clear answer to the question because it's never been asked (or not widely enough for an EU-wide answer to be developed).

<hr width=100% size=1>

 

[SimonD]

It occurs to me that there are many relatively expensive risks in buying a secondhand boat (engine failure, osmosis, rig failure etc.) and being required to pay VAT because of lack of proof of status is just one of them. A cost can easily be ascribed to the risk, but what is the probability of it occuring - I suspect its a lot lower than other risks.

So, by way of a survey: (1) has anyone ever been asked by UK or foreign customs officials for proof of VAT status (2) has anyone ever paid "post purchase" VAT either as a result or voluntarily.

Simon

<hr width=100% size=1>

 

[qsiv]

The previous owner of my boat paid VAT on import to UK from outside EU.

As is relatively common, she spent the first couple of years outside EU, and was imported as a secondahnd boat, thus vastly reducing the VAT bill.

I DO have the original pink VAT receipt from HMCE Lymington with a truly horrifically large number inscribed upon it.

As a precaution against it's theft I have a notarised copy of it lodged somewhere safe as I live in fear of the wretched item being pilfered when we are away.

<hr width=100% size=1>

 

[smee]

I have never been checked on any of my boats, mind you never gone far!

However I bought one boat in Guernsey VAT unpaid and paid it when I came back. As already mentioned somewhere in this thread, the customs official was rather surprised that I'd bothered!!!

However the piece of paper could be all important when I sell her and rather that than lose a sale as so often happens in these cases!

<hr width=100% size=1>