Buyer be ware when Buying boats from France without proof of VAT

[Poledark]

I would be interested to hear if anyone else has come across companies or individuals trying to sell French boats without proof of tax paid. If you want to take advantage of the exchange rate and buy a boat from France be aware that if you do not get proof of tax paid in France your boat could be worth 20% less when you come to sell. Worse; in the future you might not be able to sell it all. Get as much paperwork as possible and most importantly get proof the their TVA (their version of our VAT) has been paid with an original invoice from its first sale. The problem is that the French don't often keep the paperwork so move on to the next one that does have the paper work.... its is worth it in the long run. I am aware that there are many private individuals going to France to do this and that there are boat dealers selling these boats in the UK without the paperwork but at extremely good discounts. Just please please ask the question "is there proof of VAT" because the great price wont be so great when you come to have to pay the tax in the UK because you cant prove its been paid.

 

[lanerboy]

have you nearly been caught out with this then on a personal basis

 

[prv]

And what's specifically French about it?

Pete

 

[Poledark]

No I haven't luckily, I know a guy that has been caught out with an Arvor 215 he purchased and now he cant sell it as he doesn't have the VAT proof.
I have heard rumor that some one is selling these French boats in the UK without paperwork and although I have my suspicions I wondered if anyone else had come across this problem. This kind of practice is a good argument for a compulsory registry in the UK. I just infuriates me that people are being taken advantage of because they don't know that they need this documentation especially when it comes to resale.

 

[Poledark]

Nearest country with the Euro and lots of Boats, but you are right could happen in any country

 

[rotrax]

No I haven't luckily, I know a guy that has been caught out with an Arvor 215 he purchased and now he cant sell it as he doesn't have the VAT proof.
I have heard rumor that some one is selling these French boats in the UK without paperwork and although I have my suspicions I wondered if anyone else had come across this problem. This kind of practice is a good argument for a compulsory registry in the UK. I just infuriates me that people are being taken advantage of because they don't know that they need this documentation especially when it comes to resale.

Compulsory Registration would be unlikely to prove VAT status. All that proves Vat has been paid is the Certificate if imported into the EU or first invoice showing vat paid by the first purchaser.

It might get complicated if the vessel has been used commercialy and VAT has been claimed back. In the UK VAT would then be added to the price if subsequently sold, but the seller would be responsible to pay HMRC, not the buyer. I think that is how it works-but someone here might know more.

 

[Poledark]

Commercial is Part 1 registered currently so could we not have a separate register for non commercial where vat status is recorded at first sale this could be our current part 3 (SSR) but just made compulsory rather than its current status as optional?

 

[Tranona]

Commercial is Part 1 registered currently so could we not have a separate register for non commercial where vat status is recorded at first sale this could be our current part 3 (SSR) but just made compulsory rather than its current status as optional?

Don't know about the boat you are talking about, but registration is compulsory in France and a boat cannot be registered without proof of VAT payment. so, if you have the French registration document and proof of deregistration if you are registering elsewhere, that is sufficient proof of VAT payment. Also explains the lack of importance attached to keeping the original invoice.

 

[volvopaul]

Interesting you mention France, as a mate has just bough one from SOF! It came in from Italy and was purchased new on the leasing scheme them de registered in Italy to be sold off in France by a dealer, I'd assume being on a lease scheme it would be certified vat paid as its being sold on in and EU state. One for JFM maybe.

 

[Poledark]

Does this constitute proof in HRMC eyes i wonder? I asked a french broker that same point and he said that even non vat boats are registered on the same scheme. I guess either way you need the de-registration paper work.

 

[Deleted User YDKXO]

I have never understood why people buy boats that are described as VAT paid without insisting on proof of VAT paid in the form of an original invoice. If a French seller or any other seller can't provide it then knock the offer price by 20%

 

[RearAdmiral]

Really glad to find this thread. I was just about to buy across in Brittany and I have agreed a sale but didn't think about documentation. Luckily I haven't put a deposit in. What exact documents to I need to have to avoid paying VAT down the line? I guess selling a boat on is the big issue as I wouldn't be able to show someone anything???

 

[prv]

Nearest country with the Euro

So what?

The exact same issue, such as it is, exists if you buy a boat in the UK. And the issue is mostly in the minds of the boat-buying public, unless the boat's been owned commercially or imported from outside the EU.

Pete

 

[prv]

proof of VAT paid in the form of an original invoice.

...which only proves that VAT was paid on the original sale, it doesn't prove that there hasn't been another VAT-able event since then, or that the VAT associated with any such event has been paid. But it keeps your subsequent buyer happy, and that's what matters.

Pete

 

[Tranona]

Does this constitute proof in HRMC eyes i wonder? I asked a french broker that same point and he said that even non vat boats are registered on the same scheme. I guess either way you need the de-registration paper work.

HMRC are unlikely to have any interest. If you bought the boat in France, any VAT issues will be the responsibility of the French authorities. In theory boats require VAT evidence to move freely in Europe, but in practice it is near impossible to police effectively because of varying regimes of recording and evidencing in different states.

 

[Poledark]

I couldn't agree more and the reason the public understandably worry about this is because our various associations including the RYA and BMF even publish this in there guide http://www.onthewater.co.uk/pdf/Boat Buyer Guide.pdf
Its clearly important to get proof

 

[Tranona]

I couldn't agree more and the reason the public understandably worry about this is because our various associations including the RYA and BMF even publish this in there guide http://www.onthewater.co.uk/pdf/Boat Buyer Guide.pdf
Its clearly important to get proof

This is driven by the HMRC dire words of warning, which may be technically correct but in practice for most people irrelevant. Finance companies also adopt the same approach.

The underlying issue is that there are many opportunities for VAT fraud or manipulation, particularly when high value mobile assets such boats are involved. The sums involved mean that some people take the opportunity to avoid paying such large sums in tax through various schemes. Inevitably customs are interested in these sorts of problems and at some point buyers may well encounter boats where the VAT history is murky and they are right to be wary.

However, this is far removed from the everyday experience of most owners and buyers, just as most other "crimes" do not affect ordinary people. So it is matter of personal judgement whether you are concerned about documentation on boats. The biggest potential VAT problems are related to boats that have been outside the EU where VAT is levied in a different way from normal commercial transactions and it is up to the individual to declare the import and pay the tax. Clearly the opportunities for avoiding this are far greater than when buying from a VAT registered trader where the responsibility for VAT lies with the vendor, not the buyer. Usually it is easy to spot such problem boats as you will be looking for the original customs receipt rather than a grubby commercial invoice.

Just as different states have different approaches to recording the status of boats, the attitude to visitors from other states can vary. In general most states are not interested in seeing VAT evidence from visitors unless there is something that indicates an irregularity (for example a boat arriving from outside the EU). Other states, for example Croatia, recently joined the EU, has been more particular about documentation, even to the point of incorrectly interpreting the rules, but this is well documented and easily avoided.

 

[KevB]

Personally, regardless of the chances of being asked to pay the vat on a boat I purchased, I wouldn't buy one without proof of vat paid (unless I got it for 20% less than it's real worth). I just wouldn't want that niggling feeling that one day it's going to come and bite me on the ar$e.

 

[Deleted User YDKXO]

...which only proves that VAT was paid on the original sale, it doesn't prove that there hasn't been another VAT-able event since then, or that the VAT associated with any such event has been paid. But it keeps your subsequent buyer happy, and that's what matters.

It doesn't matter if the VAT has been reclaimed or not paid to HMRC. You only need to prove that a buyer has paid an invoice to a seller at some stage in the boat's history that accounts for VAT. After all if Tesco doesn't pay over to HMRC the VAT element of the 50 litres of diesel you've just bought from them, HMRC are not going to call you

 

[RearAdmiral]

Gents - I'm really pleased to have come across this "thread". I have been looking at a sport-fisher type in France and have agreed a price but am now really glad I haven't put a deposit across yet. I didn't think of the VAT issue and I really need to know exactly what form these documents take??? Also surely there is a central registry you can retrieve a copy of these documents from.