Advice on VAT invoice

MapisM said:
Otoh, if FL sells the same boat to a UK dealer, the VAT is indeed paid on invoice A, but the dealer can (and obviously does) recover it.
Therefore, even if you have an original UK "VAT paid" invoice, issued from the factory, that alone still does not bless the boat as "VAT paid" for all subsequent transactions, I'm afraid.
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this is a typical example where the whole VAT debate is not completely waterproove (AFAIK)
a better example is when the buyer is a VAT registered entity in the UK, all invoices were charged with UK Vat, and could be used to claim VAT paid (AFAIK)
but all recovered VAT, so there is zero VAT paid eventually.

back to Pete's Case,
in step 3b, when the buyer leaves the boat in Spain, he has to pay Spanish VAT to the dealer wherever he's registered EU or not
if the boat is transported to Swiss, the buyer has to provide the customs docs to the seller, to get 0% VAT, but than he has to pay Swiss VAT at the border (all AFAIK?)
 
A VAT invoice issued in the name of a non-VAT registered EU-based buyer (e.g. a private individual) will be adequate proof of a boat's VAT paid status, as long as subsequent changes of ownership have remained within the EU.

A VAT invoice issued in the name of a VAT registered buyer doesn't, of itself, prove VAT paid status as the buyer may well have claimed it back as input VAT. It is possible that the VAT would not recoverable as input VAT by the buyer and further evidence to this effect should then suffice (again, as long as the subsequent chain of owners have all been EU residents).
 
superheat6k said:
An interesting comment by the man from HMRC who assessed my recent import and VAT payment was that it is illegal for HMRC to levy VAT twice.

Thinking this point forward this means that if it is 'likely' or 'probable' or even 'possible' that VAT has been paid then benefit of doubt must de facto pass to the owner of a secondhand item, who anyway is not required to account for VAT on such item when it was first sold. This means that the onus of proving VAT paid status would always rest with HMRC, and it is unlikely they could ever prove categorically that VAT had not been paid, therefore the default position is that if in doubt 'VAT has been paid'.

Not sure I wish to be the one to test this hypothesis, although now quite few grand lighter I wish perhaps I wasn't quite so honest.
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Even more of a challenge from what I understand is paying VAT on a boat where the VAT status is uncleer / unproven. A VATtable transaction can't be created just to gain paperwork proving VAT has been paid. So for some boats it may never be possible to formalise their VAT status, even by offering to bung £xxx / 20% to the VAT man.
 
petem said:
That's the interesting point. The "VAT paid" invoice to the first owner does in practice (in the UK) appear to "bless the boat as "VAT paid" for all subsequent transactions" (even though the boat may have been subsequently exported, reimported, etc).
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I find it hard to believe P, because it wouldn't make any sense, imho.
In fact, in spite of what has become common talk, also among brokers, there is no such thing as a "VAT paid" boat.
VAT could even be due more than once, depending on the transaction rather than the boat itself.
But I'll bow to our resident gurus on UK tax & VAT matters for further explanations.
 
MapisM said:
I find it hard to believe P, because it wouldn't make any sense, imho.
In fact, in spite of what has become common talk, also among brokers, there is no such thing as a "VAT paid" boat.
VAT could even be due more than once, depending on the transaction rather than the boat itself.
But I'll bow to our resident gurus on UK tax & VAT matters for further explanations.
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I'm not saying it makes sense, in fact I'm suggesting the opposite!
 
Heck the 100 statements above since I last posted are about 50% correct and 50% not correct. Too much to type to answer them one by one.

Invoice A is non UK within EU so FL charge no VAT (as mapis says) but Spanish dealer will reverse charge VAT on himself. Either way the market seems not to want builder--> dealer invoicing and seems to think a VAT paid invoice from dealer to first end customer is what you need. Scientifically that is nonsense, but that is what the market wants and loves, so there you have it. Actually this is mostly the UK buyer's market. Other countries seem more rational

Very odd position because there are 101 ways to have a VAT invoice, but that is what the market wants

The Swiss guy would not pay VAT. He would contract to buy the stock boat from the Spanish dealer, drive out 12.1 miles, do the BoS handover etc etc, and drive it back to the Spanish marina and file for TI so as never to pay the VAT (till the 18 month refresh comes round). Perfectly legal and happens all the time. There are variations on this theme: buyer might drop the seller in tender/chase boat and carry on to another country like France, which is simpler, or Malta and a VAT lease. 101 variations on the theme

The whole VAT paid argument is mostly irrational, but the market and its irrational participants want a VAT paid invoice from the dealer to a customer, so that's what you need to wave in the broker's office, or negotiate some other solution. When you're dealing with a UK buyer, that is

Pete, actually you can create a transaction, if you really really want to. Drive the boat 12.1 miles offshore, sell it to your wife, drive back, pay VAT. If you really want.
 
petem said:
That's the interesting point. The "VAT paid" invoice to the first owner does in practice (in the UK) appear to "bless the boat as "VAT paid" for all subsequent transactions" (even though the boat may have been subsequently exported, reimported, etc). So why is this not the case for the manufacturer to dealer invoice?
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MapisM said:
I find it hard to believe P, because it wouldn't make any sense, imho.
In fact, in spite of what has become common talk, also among brokers, there is no such thing as a "VAT paid" boat.
VAT could even be due more than once, depending on the transaction rather than the boat itself.
But I'll bow to our resident gurus on UK tax & VAT matters for further explanations.
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EXACTLY! You describe the completely irrational market behaviour perfectly!
 
Apologies; I’m struggling to keep up . Consider the following example.

A UK national / UK resident is looking to buy a used boat (i.e. me)

The boat will be obviously used (e.g. 10 years old).

Payment will be via Electronic Bank transfer. There are no leases / trusts / holding companies etc.

Let’s assume the boat is purchased from an EU National/ EU resident and the transaction takes place in an EU country, and the boat is registered in an EU country.

Q1. Will HMRC apply VAT on returning the boat to the UK?

Q2. Assuming the boat will be purchased from an EU country – does the country nationality, residence, or registration change the answer to Q1?
 
DazzyWoo said:
Apologies; I’m struggling to keep up . Consider the following example.

A UK national / UK resident is looking to buy a used boat (i.e. me)

The boat will be obviously used (e.g. 10 years old).

Payment will be via Electronic Bank transfer. There are no leases / trusts / holding companies etc.

Let’s assume the boat is purchased from an EU National/ EU resident and the transaction takes place in an EU country, and the boat is registered in an EU country.

Q1. Will HMRC apply VAT on returning the boat to the UK?

Q2. Assuming the boat will be purchased from an EU country – does the country nationality, residence, or registration change the answer to Q1?
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1 Unlikely to ask as long as you can reasonably show the boat has always been based in a UK Country since first sold new inside the EU, for which you should also obtain the builders certificate. Certain EU countries tie registration with VAT obligations - I think France does this.

But note this must be an EU member state, not a state in the EEA, e.g. Norway or the Channel Islands.

2 In theory no, but for a definitive answer you would need to ask the HMRC expert - I have his name and contact details (there is only one person and an assistant )- if you want to speak with him, bearing in mind that once you do you and your possible boat will be on his radar.

After my initial enquiry about VAT payments for a purchase in Jersey he did then follow up with me.
 
DazzyWoo said:
Apologies; I’m struggling to keep up . Consider the following example.

A UK national / UK resident is looking to buy a used boat (i.e. me)

The boat will be obviously used (e.g. 10 years old).

Payment will be via Electronic Bank transfer. There are no leases / trusts / holding companies etc.

Let’s assume the boat is purchased from an EU National/ EU resident and the transaction takes place in an EU country, and the boat is registered in an EU country.

Q1. Will HMRC apply VAT on returning the boat to the UK?

Q2. Assuming the boat will be purchased from an EU country – does the country nationality, residence, or registration change the answer to Q1?
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I'll answer the question on the footing
(a) when you say "EU" you mean "EU other than UK";
(b) EU here means the VAT territory of the EU, which is almost the same thing but not quite if you're dealing with far flung islands; and
(c) that the facts you describe can be proven to a balance of probabilities standard if you are asked

1. With one exception, absolutely most certainly not. It is not merely unlikely, the answer is firmly "no". The exception is if the boat has previously in its life been smiuggled into UK, but even then you'd get light touch treatment from HMRC. We are talking uber unlikely here though
2. the boat's registration country/flag state doesn't change the anser. When you say country nationality and residence, whose? The boat only has a registration state (flag state); it has no other nationality or residence. Only humans and companies have residence and nationality in the eyes of the law, not boats (other than flag)
 
Do the French try and collect VAT from Uk car drivers when they enter France ? or indeed cross any border ,or indeed do any of EU partners attempt to collect VAT when you drive about crossing borders willy nilly in clearly "marked " reg ,d vehicle -easy identifiable? ----er Nope
So why should HMRC be bothered by a boat ?

Your new to you boat may be reg in Italy ,France or Spain if owned by an individual .Usually this compulsory reg process requires evidence of VAT paid to get on it -1st owners done that .

Allways makes me chuckle these winter VAT threads and may I say it seemingly British obsession with it .
Picture this you collect a new boat does not matter from who could be Broker say Peters few weeks before it went bust or a dealer say FL last month .,one of the last off the line .Phew !
There you have one nice shiny invoice saying VAT paid -ink still wet:)
The supplier never actually ( 3 month vat receipts ) passes your actual VAT on to HMRC ,along with workers pension contributions to the workers scheme adim .

So really in reality it's only actually been paid when the seller eventually hands it over to HMRC .
Sure they are at the head of the Q -the VAT people ,but there isn,t enough left to ever cover it .
Who cares ?
 
petem said:
The person you sell your boat on to!
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Of course he/she cares, because that will give him/her a totally unjustified, albeit rather popular, reason to negotiate a discount - nothing else!
Pretty much in the same way as you would do upon your own purchase, to start with... :D
 
What I,am highlighting is the original VAT paid invioce from new to the first owner -from ( dealer /or factory ) is pretty worthless .Cos you are assuming the dealer / factory --- passed the VAT on at the next reconciliation point -which if they were going bust they did not .VAT on big ticket items is just that BIG .
You have sailed off into the sunset -some where in the EU :)

What may be of value is a VAT receipt from HMRC pertaining to that boat .This is what you need ,but you don,t get one cos the seller should deal with it .Seller gets a reconciliation -inputs and sales .
 
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Actually, it really doesn't matter whether the dealer goes bust and never hands the funds over to HMRC. The salient point is that the consumer has paid VAT on his purchase and has a receipted VAT invoice to prove it. HMRC simply becomes just another creditor owed money by the dealer - incidentally, HMRC lost its preferential creditor status some while ago and so is now no further up the pecking order than anyone else.
 
Portofino said:
What I,am highlighting is the original VAT paid invioce from new to the first owner -from ( dealer /or factory ) is pretty worthless .Cos you are assuming the dealer / factory --- passed the VAT on at the next reconciliation point -which if they were going bust they did not .VAT on big ticket items is just that BIG .
You have sailed off into the sunset -some where in the EU :)

What may be of value is a VAT receipt from HMRC pertaining to that boat .This is what you need ,but you don,t get one cos the seller should deal with it .Seller gets a reconciliation -inputs and sales .
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But it does not matter whether the VAT was actually passed on. All the receipt shows is that VAT was levied on the last "chargeable event". That is all HMRC are interested in (if they are interested at all). The document might also serve other purposes, not least (in principle) allowing the boat to move freely around the EU.
 
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