Can't prove VAT status - anyone really had a problem

[wooslehunter]

Can\'t prove VAT status - anyone really had a problem

I like many 100s or 1000s of people in the UK cannot prove the VAT status of my boat.

It's 34 years old and has been in the UK for all of its life as far as I know. I can prove the boat was constructed in the UK prior to 1985. I have various bits of old documentation but cannot prove the boat was in EU waters on 31st Dec 1992. I do have a UK Bill of Sale from when I bought the boat 5 years ago so can show VAT is a matter for UK Customs only.

So, have any of the 100s of people in the same situation been boarded? Where? What was the outcome?

 

[Tranona]

Re: Can\'t prove VAT status - anyone really had a problem

This comes up regularly on the fora. Consensus is that it is not an issue. RYA has asked members to report any incidents, so far no significant response. Report on their website. So nothing to worry about.

Authorities have plenty to do chasing "genuine" scammers and fraudsters without bothering ordinary people!

 

[fireball]

Re: Can\'t prove VAT status - anyone really had a problem

[qutoe]so far no significant response

[/ QUOTE ]Which implies there have been some incidents ... so is it a lottery on whether you get checked, and if you can't provide the docs required then it suddenly becomes very significant for the individual!!

 

[Koeketiene]

Re: Can\'t prove VAT status - anyone really had a problem

34 year old boat - VAT deemed paid

 

[Tranona]

Re: Can\'t prove VAT status - anyone really had a problem

Only your interpretation of my observation. Suggest you read the VAT update in the Knowledge section of the RYA site - too much to quote here.

I think you will also find that there are in general no adverse consequences for an individual "failing" to produce VAT documents because no offence exists.

There are of ccourse VAT offences linked to boats like any other good that is bought and sold, but only VAT registered traders can commit those offences - related to their trade, not private transactions.

 

[wotayottie]

Re: Can\'t prove VAT status - anyone really had a problem

[ QUOTE ]
RYA has asked members to report any incidents, so far no significant response.

[/ QUOTE ]

They also asked people to report lobster pot problems and got almost no response, so I wouldnt count on that.

There have been VAT issue in the past with foreign customs - but not many and from conversations with the RYA, only in circumstances where other reasons encouraged the authorities to "go to town". For example, a rumoured job reduction program in French customs caused them to suddenly become much more active for a while. Similarly at the time of the Bosnian conflict, the Greeks who had some sort of hangup about Macedonia, the Albanians, and British activities in former Yugoslavia targeted UK boats in some areas. And the Portugese are known for a fondness for beurocracy. But such odd examples apart, it seems that it you have the key documents (reg papers, insurance) and are civil and friendly, you are unlikely to be asked for VAT documents or harassed about the sort of docs you have.

I've not heard of anyone having a problem with UK customs, but then when did you last see a customs man when coming through a British airport.

So in summary - no guarantees, but I wouldnt worry about VAT papers

 

[toad_oftoadhall]

Re: Can\'t prove VAT status - anyone really had a problem

[ QUOTE ]
I like many 100s or 1000s of people in the UK cannot prove the VAT status of my boat.

[/ QUOTE ]

Err, nobody can prove VAT has been paid on their boat. No such proof exists. At best you could prove that you gave some money to a boat builder which they claim they planned to pay to the VAT people. You'll never know if that firm paid all the VAT they should have that year and if they didn't you're not liable in any way at all.

I wish people who make these claims would back it up with some evidence. An example of a prosecution or a reference to the specific bit of legislation they're refering to would make things so much clearer.

 

[murraynorth]

Re: Can\'t prove VAT status - anyone really had a problem

not quite right, Toad - if you import a boat, the VAT authorities will give you a receipted VAT invoice following payment.

 

[toad_oftoadhall]

Re: Can\'t prove VAT status - anyone really had a problem

[ QUOTE ]
not quite right, Toad - if you import a boat, the VAT authorities will give you a receipted VAT invoice following payment.

[/ QUOTE ]

Sorry, my omission.

 

[beneteau_305_553]

Re: Can\'t prove VAT status - anyone really had a problem

Your bill of sale, if its from a UK resident, proves you are not responsible for the vat. Just keep the original of this on the boat for any inspection.

 

[oilyrag]

Re: Can\'t prove VAT status - anyone really had a problem

100s or 1000s of people can prove the VAT status of their boat by producing either the original VAT invoice from the builders, or a SAD C88 form stamped by Customs confirming that VAT was paid on first importation into the EC, or a C88 stamped by the [now defunct] Dover Yacht Unit confirming that VAT is deemed paid.

 

[steve48]

Re: Can\'t prove VAT status - anyone really had a problem

Hi
Last June, some 8 miles off Cherbourg, we were circled by a Douane craft a few times and then it followed behind us by few hundred metres. Calm sea (F2?) and motor sailing (with no triangle!).
I thought I ought to turn on the VHF (naughty not to have it on, I know) and there they were, calling me up and asking for permission to come on board.
4 Douanes came along in a RIB and three armed officers came on board, the RIB dropping back a bit. A bit scary.
We, my wife and I, were asked to provide passports and ships papers. These were provided (a bit of a panic when I couldn't find the registration doc in my canvas briefcase which has about 15 different slots and zipped compartments.
I was worried about the VAT aspect - no original but I did get a Bill of Sale photocopy from Westerly just before they went under some time after buying the boat, a 1985 model.
I thought I would leave the photocopy out of the presentation and showed the passports, insurance and Part 1 doc.
They seemed happy with these and radio'd back to their mother ship the details of our passports numbers etc.
No mention of VAT.
They were very polite and seemed happy with what we provided.
They left, and when asked why they had boarded us, they said they had reports of a similarly named vessel to ours coming from N Africa with drugs.
I suspected they boarded us to tick a box on their end of shift report to show they had been active.
No VAT worry at all.

 

[Tranona]

Re: Can\'t prove VAT status - anyone really had a problem

"VAT Status" is a made up term that does not mean the same as the VAT having been accounted for. You only find the term used in relation to boats - even though boats are no different in VAT terms from any other goods. It came about because of the nonsense when the legislation was drafted to take account of firstly VAT came into being on different dates in the EU and the little sting about free movement of boats within the EU. Strangely this legislation, as far as I can tell does not apply to cars, caravans, aircraft or any other good that can move around the EU.

So the term "VAT Status" was dreamed up to cover boats where it would be difficult to find evidence that VAT was accounted for (pre 85 build) but VAT would have been collected. Therefore the odd term "Deemed VAT paid", which Dover used to certify against evidence until they realised that they were "certifying" something that was not true.

VAT is not accounted for against the asset (boat) but against aggregated transactions in trade. The only individuals that can truly say they have accounted for VAT on their boat are those that have personally imported a boat and paid VAT direct.

 

[MarkJohnson12345]

Re: Can\'t prove VAT status - anyone really had a problem

I sometimes wonder why when driving a Japanese car around the continent, there are not gendarmes rushing after me asking whether VAT has been paid.

I don't even carry the receipt for the car!!

Just a licence and passport.

/forums/images/graemlins/frown.gif

 

[toad_oftoadhall]

Re: Can\'t prove VAT status - anyone really had a problem

Clearly proving a negative is not easy, I doubt anybody has read every French Law to check if there's one aimed at collecting ancient UK taxes from the people who happen to currently own the boat, maybe the French do have some obscure law but it's hard to imagine why.

However, since nobody has quoted the legislation they refer to or given any examples of a single prosecution I doubt such a law exists.

Some useful discussion here:
http://www.ybw.com/forums/showflat.php/Cat/0/Number/2070828/page/0/fpart/1/vc/1

I wish people would quote their sources. It really is frustrating to read claims that legislation says this or that without quoting the legislation and/or giving some examples of some convictions.

 

[oilyrag]

Re: Can\'t prove VAT status - anyone really had a problem

Yes, but the question of establishing VAT Status, as in the OP's question, is all that matters. The VAT status, artificial or not, is all Customs in another EC country would be interested in; if they were in fact to be interested in the status of a 20 or 30 year old foreign registered, visiting, boat, which they are not.

The same VAT rules in fact apply to all vehicles, [Customs deem a yacht or a boat to be a 'vehicle'] and VAT on vehicles is accounted for differently than for other imported goods. For example, if you buy a new car in France and declare that it is to be imported into and registered in the UK, VAT is not paid to the French dealer who sold you the car, but to the UK HMRC when the car is first registered. If the car was in later life taken back to France on UK plates the Frech Customs would know that VAT had been paid, 'cos it had to be in order to get the car registered in the first place. This is why boats have such a difficult time because they do not need to be registered before being put into use and therefore there is no ready way to prove VAT has been paid on any yacht other than by producing one of the documents already referred to.

 

[Tranona]

Re: Can\'t prove VAT status - anyone really had a problem

You are entirely missing the point. If you read the RYA material on VAT you will discover that there is no concrete evidence that anybody travelling in Europe has problems with non-possession of a VAT certificate. Equally there do not seem to be any reported cases of any private owner being required to pay VAT on a n existing boat because they do not have the original invoice. HMRC see no need for any new legislation because under the current legislation posssession or otherwise of a VAT invoice by a private individual is a non-event. Where there is an issue is because HMRC still seem to attach some importance to an irrelevant document. Consequently others attach importance to it, particularly finance companies who seem to refuse to advance loans secured against a boat unless it sees the (irrelevant) document.

You are correct in saying the same VAT regime applies to cars - except there is never any suggestion that you need to be in possession of the original invoice throughout the life of the car. Nor that you should be able to produce this document if you take your car to another state in the EU.

 

[wotayottie]

Re: Can\'t prove VAT status - anyone really had a problem

But you're missing the point. This whole farce came up because French citizens were buying boats in the UK, registering them in the CI and claiming back the VAT. That didnt please the French authorities at all so they started to check up. What the French customs are interested in (and other nationalities customs too) is proving that VAT has not been reclaimed on export from the EU into offshore tax havens like the CI - and thats what the original VAT invoice does prove because you have to surrender it to reclaim the tax.

And incidentally, the UK is one of a few EU countries whose reg document doesnt prove VAT status. If the govt arranged for it to do so, then there would be no need for the original VAT invoice

When chasing this issue up with HMC&E for my last boat, I was told in no uncertain terms that the same rules applied to cars and other goods if the officer concerned wished to apply them. But given that like for like a car is maybe a quarter of the cost of a boat, the VAT bill on one car is of less interest to them.

 

[saltwater_gypsy]

Re: Can\'t prove VAT status - anyone really had a problem

It is as they say a crappy situation.
If you contact Nigel Speary at the Bristol HMC&E office and tell him you REALLY need a VAT deemed paid document. He MAY write you a letter to that effect if you can provide him with the necessary continuity of Bills of Sale.
I got the necessary letter, but how I explain the term "deemed to have paid VAT" to a grumpy Portugese official on a bad day just after a big row with his wife about how the cat actually died is another question entirely.
As I said at the beginning , it is a crappy situation in which the RYA and HMC&E bear very equal responsibility.

 

[Tranona]

Re: Can\'t prove VAT status - anyone really had a problem

I have checked the DVLA site and I can find no reference to needing a VAT invoice to register a car bought in the UK, although there is reference to VAT procedures for imported cars.

Would appreciate if you could direct me to a source that says evidence of VAT payment for a new car is a pre-requisite of obtaining registration.

You do have a point about it being easier to "prove" things if there was a compulsory registration system. However, there isn't and it would not solve the problem of all the existing boats where no "evidence" exists. Compulsory registration is also likely (on the basis of what happens in other countries) to lead to unwelcome controls over the use of boats.

One of the defining characteristics of the UK population/culture is a high level of tolerence of ambiguity. This whole affair is a splendid example of that trait!