Boat missing VAT receipt

[DAC]

Hi peeps,

Have a quick question regarding a missing VAT receipt for a boat.

Looking around at the market and noticed a few boats advertised haven't got proof of a VAT receipt. Is there a way of getting one or is it a case of keeping a wide berth...??

The boats i'm seeing this on are around 10 year old etc.

Just looking to hear others opinions.

thanks

 

[gjgm]

there are many many threads on this.
Personally, and unless you are in distant waters, I think your main risk is a possible (possible, note) reluctance of future buyers.
As regards the actual tax, I wouldnt give it 2 seconds thought.
But some people want everything ticked.... On a 1 year old boat, I'd have some sympathy. On a ten yeard old one, I wouldnt care a damn.
In short, you stand no chance of getting accepted documents. the point is, you DO NOT NEED THEM (IMHO)

 

[jhr]

[ QUOTE ]
the point is, you DO NOT NEED THEM (IMHO)

[/ QUOTE ] This is also the view of jfm who, I suspect, knows a thing or two about VAT - he certainly seems to be more clued up than the HMRC VAT "expert" who was at LBS in January, and with whom he had what sounded like an amusing exchange of views /forums/images/graemlins/smile.gif.

 

[Chris_d]

I'd agree, the question has to be why do you think you need a vat receipt on a ten year old boat? assuming your not trying to import it from Spain or somewhere.

 

[Nick_H]

The general concensus is that legally you don't need a VAT receipt unless you've imported the boat, but pragmatically it's far easier to have one, because the mortgage companies, HMRC, RYA, foreign customs and future buyers all seem to think you do need one, so it's just easier to have it.

The downside is that this approach perpetuates the myth, the upside is hassle free boating and easier re-sale.

Incidentally importing from Spain isn't an issue either way, as Spain is in the EU.

 

[Deleted User YDKXO]

There are 2 ways of looking at this. There is the theoretical position, which some peeps on this forum espouse or there is the practical position, which other people take, me included. The theoretical position holds that you as the umpteenth owner of the boat do not have any obligation to prove that the first owner of the boat paid VAT on it. That's probably true and there are few if any examples of boats being impounded by the authorities, either here or in Europe, for not being able to prove VAT status
However, there are a couple of practical issues. Firstly, any finance co granting a mortgage on the boat will very likely ask to see the original or certified copy of the original VAT invoice. This is because, firstly, whether or not a boat is VAT paid affects it's value and, secondly, no finance co wants to run the risk, however small, that an asset over which they have a charge is impounded. You might not need a mortgage on the boat but the next buyer of the boat might. Then there is the issue of Part 1 registration. To get a mortgage on a boat, the boat has to be Part 1 registered (so that the mortgage can be registered) and the registration authority may also ask to see the VAT invoice. Then there is the potential risk of being asked for the VAT invoice by customs authorities in order to prove the VAT status. As I said before, nobody on the forum has cited cases of boats being impounded for non VAT payment but that's not to say that it hasn't happened ever or might not happen in the future
IMHO, any boat that cannot prove it's VAT status has to be assumed to be non VAT paid because there is a chance, however small, that VAT might have to be paid on it in the future. So that means it's value is 15% less than the value of a proven VAT paid boat. My personal view is that, with so many boats on the market, why bother with any boat that cannot prove it's VAT status

 

[smileygirl]

I had a similar problem. Solved it by finding the origianl broker/distributor who kindly (for a fee) sent me a copy of the origianl invoice etc. Worth a try

 

[gjgm]

and if you ask HMRC if they accept a copy, the answer is no.
But then, there is no reason to ever ask them, as they are never going to ask you anyway.

 

[Tranona]

The flaw in your argument is that the lack of a receipt devalues the boat by exactly the rate of VAT. This cannot be. There is no mechanism for HMRC to collect 15% VAT from a boat that does not have a receipt. The only narrow case where VAT can be collected from an individual is if the boat is imported from outside the EU. In this case you would be right. A boat imported from the US having paid freight duty and charges has a market value equivalent to 87% of similar boat in the UK.

All boats in the EU purchased from a private citizen have the same value with or without a VAT certificate. Even if the boat was found to be illegally imported by a previous owner, you would still not be liable for the VAT as the responsibility lies with the person who put it into service in the EU - and HMRC would pursue them, not you.

 

[DavidJ]

[ QUOTE ]
All boats in the EU purchased from a private citizen have the same value with or without a VAT certificate.

[/ QUOTE ]
So, if there were two identical boats for sale and one hadn't got a proof of VAT paid, you would be happy with either? tell you what I'd have the one with the VAT. /forums/images/graemlins/ooo.gif

 

[Tranona]

Your choice, but irrational.

It is this kind of thinking that fuels the nonsense. Show me anywhere, even in the tortuous material from the HMRC and the RYA that says it is an offence not to have a VAT receipt or that boats have a lower value without one.

Would ask for an original VAT receipt if you bought a second hand car privately? Or pay less if you were not shown it?

And yes, I would judge the value of a boat on how it met my criteria against what else was on offer. My title, provided I have a valid Bill of Sale, and functionality is exactly the same with or without an original VAT receipt!

 

[DavidJ]

I have been pulled over (literally) by the Guardia Financia just outside Barcelona with their well armed boat. They checked through all my papers which were in order. I have no way of knowing what would happen if they hadn't been but this is a real situation that you can find yourself in in foreign parts, so for me its not "fueling the nonsense" and important to communicate this to others who may find themselves outside the UK. It's very difficult to argue international law (in Spainsh) on the high seas even if your right.
As it happened the Guardia Financia did their job pleasently and only took up 20mins of our time.
My advice for a quiet life......get the proof of VAT paid or pass the boat by (even if it has been reduced by 15%)

 

[Deleted User YDKXO]

[ QUOTE ]
Even if the boat was found to be illegally imported by a previous owner, you would still not be liable for the VAT as the responsibility lies with the person who put it into service in the EU - and HMRC would pursue them, not you.


[/ QUOTE ]

I take it you've got that in writing from HMRC? Or perhaps the Guardia Civile? Or maybe from the Netherlands customs officers who asked for my documents including proof of VAT payment, albeit some years ago now. I take it you also have it in writing that the current somewhat laissez faire position won't change in the future?
I'm not arguing the theoretical point which, no doubt, is technically correct but the practical points. What about, for example, the fact that finance co's ask for proof of VAT status when assessing a mortgage application? Do you not think this alone makes having a VAT invoice a valuable asset?
I've bought a good number of secondhand boats in my boating life (12 and counting) and I certainly wouldn't buy a boat which is sold as VAT paid without having proof of that

 

[jadeflyer]

I've had six boats in my time. I have never (apart from my present one) had what I would call a rock solid original vat receipt. They all had assurances of vat payment with copies and affidavits which seemed to be ok as I bought them and had no trouble selling them on.

The reason I have a rock solid one now is that I bought it from new and so have the original invoice which shows the vat, which is locked away in the safe so it won't be lost like all the others.

 

[Whitelighter]

The really funny thing here is, your invoice, the one you have locked in a safe for all time to prove VAT has been paid...

...It doest /forums/images/graemlins/smile.gif

All it proves is the broker/dealer charged VAT. No way to actually prove the VAT has been paid to HMRC on that specific boat.

Ever

Nice bit of paper though.

By the way, I have a very good laser printer, am pretty handy with photoshop and can get high res imagaes for just about every boat dealer or manufacturer on the web. Anyone want a VAT invoice? And how many customs officers, Guardia what not or Hairy French standing on a small boat 1/2 a mile of Antibes or whereever could tell it wasnt genuine?

Or could even access a mechanism to check?

 

[Hurricane]

[ QUOTE ]
Or could even access a mechanism to check?

[/ QUOTE ]
Is there even such a thing Jez? - anywhere?

 

[Whitelighter]

No there isnt and that was my point. There is no way for any customs officer here (never mind abroad) to check if a document is correct of if VAT has been received for a specific boat by HMRC. They certainly cant do it at the time, and I doubt even with meticulous investigation and a month on the job a Spanish could get details from Blighty.

 

[David_Jersey]

[ QUOTE ]
No there isnt and that was my point. There is no way for any customs officer here (never mind abroad) to check if a document is correct of if VAT has been received for a specific boat by HMRC. They certainly cant do it at the time, and I doubt even with meticulous investigation and a month on the job a Spanish could get details from Blighty.

[/ QUOTE ]

Using the old innocent until proved guilty approach. How very 20th Century /forums/images/graemlins/ooo.gif

I wouldn't buy without evidence of VAT being paid - and whilst I know that a VAT invoice is not absolute proof of VAT being paid for me I also factor in <u>why</u> would such a document which not only evidences VAT being paid but also forms a part of the Title documentation get thrown away "accidently"........mmmmmm.

 

[Tranona]

Are you sure that a VAT receipt is part of the Title documents?

As far as I am aware the only document that proves title is the Bill of Sale transferring ownership to you from the previous owner. Title can be confirmed by the boat being registered on Part 1 (or at least confirm that no third party interest is registered against it), but registration does not require production of a VAT receipt.

All a VAT receipt does is provide some evidence that you have paid an amount of money to a VAT registered trader. There is no requirement that this receipt identifies the boat as an entity (ie HIN, name builder, model etc), only sufficient description that the transaction involved goods that are subject to VAT. I know that most receipts will contain more detail but there is no specific requirement, nor is there any requirement to register or record the payment anywhere else.

Interestingly, I bought my boat in Greece and paid VAT to the dealer. In Greece boat registration is compulsory. My VAT receipt describes the boat by its (now non-existent) Greek registration number and name. To transfer title to me I have a certificate of deregistration and transfer of title from the registrar and a Bill of Sale from the dealer, also endorsed by the registrar. On neither of these documents is the "consideration" or VAT mentioned or required. That is all covered in a commercial invoice from the dealer.

I shall, of course keep the receipt because my boat was originally a charter boat which in Greece is VAT exempt while it is still on the register. Buyers, knowing the history would be suspicious without it, although again if I had somehow avoided paying VAT a subsequent buyer would still not be liable if they bought from me as a private EU resident. The responsibility for accounting for VAT on my boat lies soleley with the dealer as in all other transactions (with the exception of imports)

 

[Whitelighter]

My point, David, is how do you know that the VAT invoice on which you hold so much value hasnt been produced on the current owners laser printer? How can you prove its the original?

The fact is you cant, and neither can the authorities. After all, most original invoices are produced in that way.

So in effect, you are still taking something on trust.

How very 20th Century indeed....