boat based in the UK

[sailaboutvic]

Some thing I posted some time back carring prove of vat on board while sailing locally.
At the time of my posting many didn't think it was going to be a problem as they where home base sailors.
Now its clear that HMRC are advising everyone should carry not only prove of payment but also where the boat was kept Dec 2020,
Hiw many are do so ?
The other interesting question , what going to happen in some years to come when people go to see and prove can't be found.

 

[Buck Turgidson]

I have a notarised letter from the Harbour master for both 2020 and from 1992 (thanks to a previous owner). It's not difficult!

 

[Tranona]

Nothing new, Vic. They have always said this but it does not change reality for most people> there is nothing in law that says you have to do this, nor any offence you can commit EXCEPT they may be suspicious of boats coming into the country because it is an offence to import a boat without declaring it. Whether this becomes a widespread issue depends on how many people try to avoid the rules, and my guess, like after 1992, very few and it will become a non issue.

 

[Elessar]

Some thing I posted some time back carring prove of vat on board while sailing locally.
At the time of my posting many didn't think it was going to be a problem as they where home base sailors.
Now its clear that HMRC are advising everyone should carry not only prove of payment but also where the boat was kept Dec 2020,
Hiw many are do so ?
The other interesting question , what going to happen in some years to come when people go to see and prove can't be found.

Where are HMRC saying this?
I guess they would. Makes their job easy. They have to prove you DIDN’T pay it. Not the other way around.
Not many people don’t have receipts for a mooring/marina though.
Your second question is more interesting and will manifest itself in what buyers demand when boats are sold secondhand.
The myths around VAT even before brexit were bad enough.

 

[Robin]

I have a notarised letter from the Harbour master for both 2020 and from 1992 (thanks to a previous owner). It's not difficult!

We were offered and have the same from our marina management for Dec 2020, scanned and filed both electronically and physically. Our current boat/home has never been based anywhere other than in UK waters so I don't expect too much interest from HMRC.

 

[sailaboutvic]

Where are HMRC saying this?
I guess they would. Makes their job easy. They have to prove you DIDN’T pay it. Not the other way around.
Not many people don’t have receipts for a mooring/marina though.
Your second question is more interesting and will manifest itself in what buyers demand when boats are sold secondhand.
The myths around VAT even before brexit were bad enough.

Take a look at note 8 HMRC
,"
Documentary evidence supporting VAT status should be carried at all times as you may be asked by customs officials to provide evidence of your vessel’s UK VAT status. Documentary evidence might include:

• original invoice or receipt
• evidence that VAT was paid at importation
• invoices for materials used in the construction of a ‘Home-Built’ vessel"I agree with you second question , many may keep their boats on private land or their own mooring do it's not so easy to prove where the boats Been , come the day to sell , maybe some are going to have problems .
• It also goes on to say (
• The following documents are useful to prove the age and location of the vessel:
  

  For Age	For Location
  Marine survey	Receipt for mooring
  Part 1 Registration	Receipt for harbour dues
  Insurance documents	Dry dock records
  Builders certificate

  )

 

[Elessar]

Take a look at note 8 HMRC
,"
Documentary evidence supporting VAT status should be carried at all times as you may be asked by customs officials to provide evidence of your vessel’s UK VAT status. Documentary evidence might include:

• original invoice or receipt
• evidence that VAT was paid at importation
• invoices for materials used in the construction of a ‘Home-Built’ vessel"I agree with you second question , many may keep their boats on private land or their own mooring do it's not so easy to prove where the boats Been , come the day to sell , maybe some are going to have problems .

Note 8 of what?
An original invoice or receipt proves nothing! One of the myths.

 

[sailaboutvic]

Note 8 of what?
An original invoice or receipt proves nothing! One of the myths.

HMRC sailing your pleasure craft .

 

[sailaboutvic]

Agree original invoice only prove vat was paid at the time , if they do decide to stop and ask , there also be looking at where the boat was Dec 2020 .
At this time people can and should get some kind of letter from the marina but what on three four or five years down the line when that letter lost and you go to sell ,
And as I said there be many with trailer sailors and people who keep they boat on land , other many had they boats for some years on private land or in drives .
I can think of a few who got their own laid mooring that don't pay and crown dues

 

[Sandy]

I wrote to my MP about this, he returned some waffle that said nothing from the HMRC apart from the regulation above. Despite asking for clarification the sound of brushwood being blown across the desert was heard.

 

[Tranona]

Again Vic, nothing new about this - has been there forever.

It only comes to prominence because of the changes after Brexit which, as I suggested earlier may lead to more boats coming into the UK VAT area now that the EU is a "third country". Add to that the new definition of "UK VAT paid" based on being in the UK on 31/12/2020. Just the same happened post 1992 and indeed some people were caught out trying to import boats without declaring them. The reality however is that it has no impact on boats in the UK. HMRC are not going around asking for proof UNLESS they believe an offence has been committed, and the only offence for private boat owners is importing a boat and not declaring it. Given the enhanced activity by Border Force and HMRC much of this questioning (if any) is likely to occur through monitoring of the border.

Must emphasise that there is no legal requirement to have any of the documents listed, nor any mechanism to make people pay VAT on existing boats unless the boat is involved in a "chargeable event", which leads us full circle to imports.

VAT Notice 8 is about imports or sailing in and out of the UK so only affects a tiny minority of UK based boats, most if not all of whom should have no difficulty in providing evidence that the boat is UK VAT paid with documents from the list.

 

[duncanmack]

However, if HMRC decide, like they can and do with other tax matters, to hit you with an assessment of tax due then it's up to you to disprove their assessment.
That's not much fun.

 

[Tranona]

However, if HMRC decide, like they can and do with other tax matters, to hit you with an assessment of tax due then it's up to you to disprove their assessment.
That's not much fun.

No they can't. VAT is nothing to do with any other tax such as income tax.

I have already explained, the only way they can investigate is if they believe an offence has been committed, and for a private person (as opposed to a VAT registered entity) is if the boat has been brought into the UK from outside.

VAT is a tax on transactions, not on income or assets.

 

[Graham376]

However, if HMRC decide, like they can and do with other tax matters, to hit you with an assessment of tax due then it's up to you to disprove their assessment.
That's not much fun.

"Not much fun" can be an understatement. Those of us who've had VAT inspections know just how far they will go sometimes and, whatever rules of proof normally apply, if you can't prove you've paid, they will issue an assessment.

Times have changed and I wouldn't now buy a UK boat without a complete paperwork trail from new.

 

[Tranona]

"Not much fun" can be an understatement. Those of us who've had VAT inspections know just how far they will go sometimes and, whatever rules of proof normally apply, if you can't prove you've paid, they will issue an assessment.

Times have changed and I wouldn't now buy a UK boat without a complete paperwork trail from new.

But VAT inspections are a completely different thing. Once you register for VAT there are very clear rules to follow and HMRC have legal means of determining that you are following the rules.

No such law or rules apply to privately owned boats UNLESS the boat has been brought into the UK from outside by a private person. This is the only situation where a private person is under any legal obligation to pay VAT.

So, while it is nice to have all the things that might constitute evidence that VAT has been paid, there is no legal obligation to have them. Times have not changed except the new definition of what is considered VAT paid which in practical terms means boats outside the UK on 31/12/20 are not. If such a boat is imported it is potentially a "chargeable event" unless the owner/boat is eligible for one of the reliefs. Again nothing new - it has been like this for 30 years.

If anything, owners of boats based in the UK (which is what this thread is about) will find proof easier as they only have to show that the boat was in the UK on 31/12/20.

 

[sailaboutvic]

But VAT inspections are a completely different thing. Once you register for VAT there are very clear rules to follow and HMRC have legal means of determining that you are following the rules.

No such law or rules apply to privately owned boats UNLESS the boat has been brought into the UK from outside by a private person. This is the only situation where a private person is under any legal obligation to pay VAT.

So, while it is nice to have all the things that might constitute evidence that VAT has been paid, there is no legal obligation to have them. Times have not changed except the new definition of what is considered VAT paid which in practical terms means boats outside the UK on 31/12/20 are not. If such a boat is imported it is potentially a "chargeable event" unless the owner/boat is eligible for one of the reliefs. Again nothing new - it has been like this for 30 years.

If anything, owners of boats based in the UK (which is what this thread is about) will find proof easier as they only have to show that the boat was in the UK on 31/12/20.

I don't disagree with most you said , except the rules. While we was in the EU was straight forward and I not heard or read anywhere that HMRC have asked anyone for any prove unless a boat was brought in for the US, the likelihood some where alone the lines it was vat paid some where .

Also HMRC are now asking people to carry prove , they never did before which get you to wonder what they have plain.

You correct in saying you don't need to carry prove well for now anyway.
But it's not that straight forward to satisfy them that the boat UK vat paid .

Let's say someone like myself who live full time on board and on my hook in the UK is stopped after a weekend trip to France or just coast hopping and asked for documents , sorry sir I don't have them with me ,HM ok name address and we want prove vat been paid an where the boat kept ( I guess it will go that way )
Here I am I have invoices to show vat been paid when the boat was new . But nothing to say where the boat was Dec 2020 ,
Let's see what other documents can I show . Fuel receipt , who keep fuel bill ? Haul out , did get haul out , boat CC no need for haul out , boat kept on anchor so no marina bills,
This could start to sound strange .
Ok you probably say how many live full time in the UK on their hook and would have this problem ,
I would say who to say that BF are not going to check VAT states every boat they stop .
As for me , my boat won't every come back to the UK so no worries on my part but what really piss me off is mine is vat UK paid from new but because I'm the second owner I'm libal for it a second time if I sail it back to the UK .

 

[Tranona]

The advice has always been the same if you travelled around Europe because to be allowed free movement for your boat within the EU you should have been able to show proof of VAT payment (or Deemed VAT paid0. All that has happened is the date for "Deemed VAT paid" has changed which will in fact make it even easier to comply.

Despite the myths, this never seemed a problem for the 30 odd years those rules were in force, so why should it prove a problem now? Nothing has changed for boats that never leave the UK and those that do go outside just need to be aware (as the notice suggests) they may be asked for proof when they return.

 

[sailaboutvic]

Advise as not change agree what have change is where before as long as a boat was vat paid somewhere in the EU it could come and go as it please the question of let's see your vat states wasn't asked and not only in the UK but all over the EU actually I never been asked any where and as you know I been cruising the EU for well over 35 years ,

The point I'm trying to make Maybe badly ,
Is where when we was members of the EU boats wasn't asked , (well not that I heard or read about ,) if stopped now and ask last port of call and it happen to be an EU ,( or it don't have to be the EU you could just be coastal cruising) will the next question be , let's see vat prove.


As I said in the other post not everyone can prove the boat was based in the UK Dec 2020 and just having a a vat paid invoice is no longer enought.