Boat missing VAT receipt

Of possible interest to anyone contemplating the purchase of a second-hand boat in Holland. If the original VAT-paid receipt is not available, you can invite the Customs authority to inspect what documentation is available and give them authority to make other enquiries. They will then exercise their judgement and if they decide VAT probably has been paid, they will issue a certificate to this effect. This is a gem because the wording effectively tells other EU authorities to butt out!
I did this. The service was free and the Dutch customs man was very proud of the fact that Holland is the only EU country to do this. HMCE please note - its obviously not rocket science!!
 
But it is just a fairy story! HMRC used to do this from an office in Dover, but discontinued it many years ago because they realised that what they were certifying was not "true".

So now we are left with he very unsatisfactory situation where they say it is "important" to have such a document (but do not explain why), say only an original will do, and then never ask to see it - because they have no reason to do so.

In the meantime lawful business is held up because some organisations such as finance houses believe it is important (but don't know why) and refuse finance without it.

Never mind all the law abiding members of this forum who seem to live in fear of their boats being impounded - and even suggest that boats are worth substantially less than their free market value without it!
 
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But it is just a fairy story!

[/ QUOTE ] Pardon? This procedure has given me a certificate issued by the government of an EU member state confirming that they are satisfied that any VAT due has been paid. Can't see how you can get better than that. The original sales invoice/receipt certainly doesn't provide that degree of assurance. I am not entering the debate as to whether such proof is required, just highlighting what some authorities are prepared to provide. Although I do have a sneaking suspicion that the main supporters of the 'its not necessary' argument are actually those who don't have it for their own boats.
 
Not saying your story is a fairy story, just that what you have from the VAT people is a fairy story in the sense that they are unable to "account for VAT" which is the term used in the legislation. As I said, that was part of the reason why HMRC stopped doing it as it has no more meaning than any other piece of paper. However, if you think it stops any body asking questions then fine.

All this illustrates the pickle our legislators got into when trying to apply a transaction tax to an asset. It would be very different if at the same time they had made it compulsory to register a boat and that registration would be conditional on a permanent record of payment of a "boat tax" which might be the same rate as VAT. But they did not because the practical implications of trying to do that would be even more awful than the current mess - particularly if they tried to make it retrospective, which in part they have - ie the legislation came out after VAT had been introduced.
 
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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.

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It's not the boat owner's responsibility to ensure that the dealer has paid over the VAT to HMRC only to prove that VAT has been paid to the dealer. Does a buyer of a car have to prove that a dealer pays over the VAT he's just handed over for buying a car? Or any other vatable purchase?

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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?

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Maybe they can't, maybe they can but I can assure you that European customs authorities talk to each other. One of my Italian business suppliers were recently asked by Italian customs to supply them with a list of transactions with my company at the same time as HMRC asked us for the same thing. Falsifying a VAT invoice is probably punishable by imprisonment. Is buying a boat without proof of VAT status worth that?
 
What you are talking about in your last paragraph could involve an offence because it is about VAT registered businesses who are responsible. Such "offences" by definition cannot be committed by individuals. There is no responsibility for you to "prove" that you have paid VAT to a trader. The only responsibility is his to ensure that he accounts for VAT on the transaction.

Once you understand this you understand the irrelevance of being able to produce a piece of paper to "prove" something you as an individual do not have to "prove".

I am sure that there is a lot of co-operation between authorities in different countries as it is in cross border trading that many of the "opportunities" for VAT scams present themselves.
 
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There is no responsibility for you to "prove" that you have paid VAT to a trader. The only responsibility is his to ensure that he accounts for VAT on the transaction.

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Now thats an interesting angle I hadnt seen.
 
Thanks Tranona. You keep restating your point over and over but fail to address my points in favour of obtaining a proof of VAT paid document
 
Oh, but I have. You feel more comfortable having the document and I can understand that -even though the negative aspects you quote are not "real".

However, I think your point about a boat having a lower value without it is a not supportable. Yes, it has a lower value if it is clearly not "tax paid" such as being sold by a company which has to account for VAT or it is being imported. Once the boat is being sold by one EU resident to another in the normal course of events its value is what the two parties agree. You may choose to not buy without the piece of paper, but you could just as easily choose not to buy because you don't like the colour of the upholstery!
 
No you haven't. One of the points that I've repeated now 3 times is that a finance co will ask for a copy of the VAT invoice before agreeing to a mortgage on the boat. So what's your response to that? A potential purchaser not being able to get a mortgage on a boat he's thinking of buying will definitely affect it's value
 
Interesting post this, especially as their is no such thing as PROOF of VAT paid. Even if you have a newish boat and the original invoice.

How do you know that the dealer did not claim the VAT back. How do you know that the original owner did not sail the boat out of Europe for an extended period of time and lost the VAT status on the vessel.

VAT paid can not be proved, only suggested!!
 
I do not have direct experience of that situation so I cannot comment. It seems that some finance houses do want to see it, but I don't know whether it is universal.

If it is, it illustrates how out of control the whole situation is when people are being penalised for not having a document they do not need to have. However, I guess at the moment finance houses have enough on their plates without worrying about this!

Anyway it still does not automatically devalue the boat, it only potentially limits the numbers of potential buyers. A buyer who cannot get a mortgage will not pay less - he simply won't be able to buy it.

Just to re-inforce this do you ever see an ad "15% off because I don't have a VAT receipt" You do, however see boats advertised secondhand ex VAT at prices lower than other boats. These are boats that are being sold by VAT registered companies (charter operators for example) who will have to charge VAT on the agreed sale price. They are quoted in this way because you do not know what the final price will be until the deal is done. A buyer, making comparisons would add the anticipated VAT to compare the price with a boat on offer from a private individual where there is no VAT to pay.
 
I think that for a lot of the reasons stated in this thread, we should have a National Boat Registration scheme that is government run and compulsary to all owners. I know that the industry want it. It will solve all the problems of VAT status and who sold it to whom the first time. The "log book' would then prove title amongs a host of other issues.

Perhaps this should be the subject of a new thread?
 
You have Certainly thrown a significant spanner in the works with your argument that a boat may have lost its 'vat paid' status and I agree you should start a new thread as there is a danger many will miss this as it is lost half way through a thread.

Your credentials may also add weight to the thread especially if you take the trouble to add a little about how you are involved in the Marine Industry.
 
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How do you know that the dealer did not claim the VAT back. How do you know that the original owner did not sail the boat out of Europe for an extended period of time and lost the VAT status on the vessel.


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You don't know any of that. Firstly, whether or not the dealer paid over the VAT to HMRC or in some way fraudulently held on to it is of no concern to the boat owner. That's a matter for the dealer and HMRC. The issue of whether a boat has been exported from the EU and re-imported is certainly of concern for the boat owner as VAT would be liable on re-importation after a certain period. Thats one reason as to why it's so important to establish the chain of ownership of a boat and it's history
 
Finance houses want to establish the VAT status of a boat precisely because it assists in determining the value of the boat and their lending criteria will partly be based on the value of the boat. If for example, one of their criteria is that they will only lend, say, 80% of a boat's value, then they need to know what's it's value is
If I, as an experienced used boat buyer, considers that a boat without proof of VAT status (yes I know you can't prove that VAT was actually handed over to HMRC beyond all doubt) is worth less than one with proof of VAT status, then you can bet there will be other buyers who feel the same. At the very least it is a stick with which to beat the price down during negotiations. So, I stand by my comments regarding the value of boats which are sold as VAT paid but without documentary back up.
Yes, I know perfectly well why boats are offered ex VAT. I have owned 2 ex VAT boats myself. Sorry to be a pedant but it's not altogether true that VAT is paid on the sale of an ex VAT boat. If the sale is between 2 VAT registered EU companies in different EU countries, then VAT is not applied to the invoiced value
 
Don't think you would get much support for a compulsory registration scheme. This was considered at the time of the introduction of the SSR but rejected as unnecessary and unworkable. It is only in the area of VAT, which as you know is a mess that there is any "difficulty", and most of that is irelevant to most people. Of course there are grey areas, such as the bizarre rules about "VAT paid" boats that leave the EU and subsequently re-enter. However, does not seem any evidence that this is a major problem that affects lots of people.

There could be more of a case for registration if a boat did have a legal status like a house and land, but it does not. It is just another consumer good like a television, and just like such goods it is subject to VAT when it first enters the market. Once that has happened any further sales between private residents are no longer subject to any tax, so why does one need any registration system?

And it is naive to think it will solve all the problems of VAT "status". As has been pointed out many times there is no such thing as VAT status attached to an individual boat alrerady in existence. You could only create it for future boats by altering the law in such a way that the tax becomes an asset tax on the boat. Then it is no longer VAT.

This whole subject has echoes of the drink/boating debate. An unworkable law proposed to deal with a problem which on the evidence available does not exist!
 
At the very least it is a stick with which to beat the price down during negotiations. So, I stand by my comments regarding the value of boats which are sold as VAT paid but without documentary back up.
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While I see what you are saying, that depends on the number of buyers and the number who are concerned. If a boat is £100k, and 4 people are looking at it, two of whom want 15pct of via VAT, it doesnt mean it wont sell for £100k to one of the others.
We can come up with all sorts of possibilities. On balance, I would agree it MIGHT have a negative effect on a sale price. I m just suggesting that just bcz you wont buy it doesnt mean that I wont.
Actually, it might become just another part of the buying process. The majority of buyers seem to start out with the opinion the seller is on his knees, and will be begging for a deal. In fact I think thats total crap. Most sellers know what they want and dont sell if they dont get it. Thats why its pretty pointless making silly offers. (IMHO)
 
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