Another VAT question

[petem]

I agree with Tranona here.
By all means try and reduce the price using VAT as a reason but if you get a deal done in an EU port and the paper trail shows VAT previously paid, no-one would ever know that the boat was in Jersey.

+1. If his wasn't the case then every boat owner could have a VAT liability unless they understood the vessel's movements throughout its life.

 

[Tranona]

Is there any evidence that VAT was originally paid, or are you taking the vendors word for it? I don't understand why someone either resident in Jersey or intending to keep their boat here, would have chosen to pay VAT. I wouldn't! Where is the evidence that VAT was actually paid, and if it wasn't then you know for sure that it will be due on import into the EU.

Read the OP. He clearly states that VAT was paid in 2006. Not unreasonable to assume that the vendor will have the original receipt. If he was also the original owner it makes the trail even better - no intermediary owners between the time VAT was paid and the current proposed transaction. Bill of Sale in Eu in 2006 plus all other original documents including receipt. Bill of Sale from the same person to a buyer in the EU. Pretty bullet proof.

 

[JT57]

Bullet proof once you've actually seen the documentation.

 

[Bathdave]

VAT is an incredibly complex tax.

I fear some of the statements on here are not correct as not every one (some have) has clocked a couple of very important facts

1. current owner is not an EU resident
2 . Boat was exported more than three years ago.

My reading of the rules (and I have looked very closely at them as a previous resident of the UK, currently resident outside the EU in jersey,looking to import a non VAT paid to the UK on my relocation.) is that the boat has lost it VAT paid status and will therefore be liable to VAT on reimport. Seems harsh as VAT has been paid on the boat once. But that's not how VAT works.

I do not think occasional visits to EU ports will be sufficient to maintain its VAT paid status, but I may be wrong on this point.

Executing the transaction in the UK (get a broker or a delivery sailor to take it over) can only help, and may create another argument of keeping its VAT paid status.

On the face of it,it is your responsibility to declare it, HMRC do have some trigger points, after all the tax involved is quite substantial.

Where is the baot registered?is it on the Jersey sub-register of the SSR?.

My view is that it is likely HMRC will seek to tax the transaction, and you have to take a view on whether you will declare it and try to argue that it's not taxable, or not declare it and run the risk they will come looking for you. If the baot is registered in jersey it is likely to be a bit of a red flag to them.

If you do not declare it, and do get away with it, I would expect the original VAT receipt will be good enough when you come to sell it..your purchaser won't necessarily clock that it spent some time out of EU before you bought it.

 

[Tranona]

VAT is an incredibly complex tax.

I fear some of the statements on here are not correct as not every one (some have) has clocked a couple of very important facts

1. current owner is not an EU resident
2 . Boat was exported more than three years ago.

My reading of the rules (and I have looked very closely at them as a previous resident of the UK, currently resident outside the EU in jersey,looking to import a non VAT paid to the UK on my relocation.) is that the boat has lost it VAT paid status and will therefore be liable to VAT on reimport. Seems harsh as VAT has been paid on the boat once. But that's not how VAT works.

I do not think occasional visits to EU ports will be sufficient to maintain its VAT paid status, but I may be wrong on this point.

The rules on Returned Goods Relief make no mention of residency being a requirement to take advantage of the relief. Think perhaps you are confusing this relief with the returning residents relief which is a very different thing. Lots of non residents own VAT paid boats in the EU and the boats can move freely both within the EU and in and out of the EU (subject to returned goods relief). Such boats would not lose their status if the conditions are met - that is the return is within 3 years and ownership has not changed while the boat is outside the EU.

The buyer does not have to declare anything if the boat is in the EU and still in the same ownership before he buys it. If there is any issue with HMRC it is for the current owner to resolve. The buyer only needs to declare if the transaction takes place outside the EU and he then becomes the importer.

This whole issue depends on the willingness of the current owner to return the boat to the EU (which he can hire a skipper to do) and ensure that the transaction takes place in the EU at the same time as the boat is physically there.

 

[Tranona]

Bullet proof once you've actually seen the documentation.

Thats obvious. If there is no original invoice showing VAT then the situation becomes less secure. There is no suggestion from the OP that this is the case, so it is reasonable to make the assumption that this course of action is feasible.