certificate of exemption for vat

[benlui]

Where can i get a certificate of exemption of VAT for me vessel, if there is such a thing? My boat is vat exempt, and this year im planning a trip to France so will need to have the paper work completely spot on.
I can’t just tell the officials (she’s exempt) surely I need to prove it on paper?
Ide imagine im not the only yachtie with this question.

 

[Wunja]

This might be helpful.

Unit of Expertise

 

[oldfatgit]

You need to talk to HMRC who should issue you with a letter once you have provided them with the evidence. I fear you will have to start by talking rather than filling in a form and so you will have to phone. Look here http://search2.hmrc.gov.uk/kbroker/...ha=34&tx0=21&fl0=contactid:&tx1=&raction=view.

 

[Tranona]

Where can i get a certificate of exemption of VAT for me vessel, if there is such a thing? My boat is vat exempt, and this year im planning a trip to France so will need to have the paper work completely spot on.
I can’t just tell the officials (she’s exempt) surely I need to prove it on paper?
Ide imagine im not the only yachtie with this question.

No, you are not the only person with this "problem" - except that it is not a problem. There is no such thing now as a Certificate of Exemption. For a short while after the new VAT rules came in HMRC was issuing certificates for qualifying boats (pre 1986 and proved to be in the EU in 1992), but stopped for two reasons. Firstly there is no way you can ever prove VAT has been "properly accounted for" because there is no record (in the UK at least) that ties VAT to a vessel. This is not surprising because VAT is not a tax on an asset, but on a transaction. Secondly a boat could lose its "VAT paid status" at some point in the future - for example if it was exported and sold outside the EU.

So, if the boat is older than 1986 no problem at all. If it is younger than 1986 it is still in practice no problem because the French authorities are not in the least bit interested in proof of VAT. This is because responsibility for VAT matters lies with the state where the last transaction took place. Therefore if your Bill of Sale is in UK then any VAT issues are the responsibility of HMRC. If the Bill of Sale is recording the transfer of ownership between two EU residents, no VAT is involved. I know you are in Ireland, so for UK read Ireland because the rules are the same.

Suggest you go on the RYA site and look in Taking Your Boat Abroad. This will tell you all you need to know. There is also a section on VAT. Everything there is the same as for Ireland, except you registration system is slightly different. The key documents you need are the yachts Registration document and the Bill of Sale plus VHF licence and operators certificate, Insurance and if you are going into inland waterways an ICC - plus of course your personal documents. In practice they are only interested in the registration document which proves you are a non-French boat.

So, don't worry about it and enjoy your time in France.

 

[PeterGibbs]

Where can i get a certificate of exemption of VAT for me vessel, if there is such a thing? My boat is vat exempt, and this year im planning a trip to France so will need to have the paper work completely spot on.
I can’t just tell the officials (she’s exempt) surely I need to prove it on paper?
Ide imagine im not the only yachtie with this question.

If you have an Eire passport you need take no action nor make any declaration when visiting another EU country, just be ready to show your boat is registered in Eire. Taxation is a consideration for the country of residence, not visiting.

If you and or your boat are deemed to take up residence in another EU country, you will find the authorities there take a quite different level of interest in you.

All assuming, the authorities in your home country, Eire, are quite happy with the status of your boat?

PWG

 

[Boo2]

Hello Tranona, fancy seeing you here

So, if the boat is older than 1986 no problem at all. If it is younger than 1986 it is still in practice no problem because the French authorities are not in the least bit interested in proof of VAT. This is because responsibility for VAT matters lies with the state where the last transaction took place.

Does this mean if I buy a boat outside the EU, sail it to Greece and get my docket stamped, ask to pay the VAT and am told to FO (as I hear is the rule in Greece under these circs) and then sail it to the UK I am safe from VAT ?

Boo

 

[Tranona]

No. First of all the Greek authorities will not tell you to FO - no matter what people may say. I don't know what you mean by getting your "docket stamped". They will want to see your registration document and your Bill of Sale. If this shows the boat was bought outside the EU you will pay VAT and get a receipt which you will need to keep. You will also need a cruising log if your boat is over 10m. Even if you avoid paying VAT in Greece by not reporting to the Port Police, the next EU country will get you because when you present your documents which show the boat was purchased outside the EU you will be required to pay VAT there.

This does not, of course mean that the authorities catch everyone because it is possible to enter a country, particularly the UK without reporting to anybody. That is not the case in many Med countries, firstly because they have more extensive controls in ports and marinas and secondly because in places like Italy, Greece and Spain where they have neighbours who are outside the EU they pay more attention to potential offenders!

This alll assumes you are EU resident. If you are non-resident you can apply for temporary importation but there are restrictions on how you can use the boat and you cannot sell it in the EU without paying VAT.

 

[Tranona]

You need to talk to HMRC who should issue you with a letter once you have provided them with the evidence. I fear you will have to start by talking rather than filling in a form and so you will have to phone. Look here http://search2.hmrc.gov.uk/kbroker/...ha=34&tx0=21&fl0=contactid:&tx1=&raction=view.

Not true. See my post below yours. If you have "evidence" it can only be the original VAT invoice which is the only "evidence" HMRC will accept. So why would you need a letter? which they would not give you anyway!

 

[Boo2]

No. First of all the Greek authorities will not tell you to FO - no matter what people may say. I don't know what you mean by getting your "docket stamped". They will want to see your registration document and your Bill of Sale.

But, hypothetically, if I did sail from a non-EU country to Greece then to the UK after getting proof that I'd docked in Greece. Surely I could point to that fact as being indicative that the country of import was Greece not the UK and so escape paying VAT in the UK ?

<FWIW, I don't believe that it's that easy either, I am playing devils' advocate here...>

Boo2

 

[dt4134]

Where can i get a certificate of exemption of VAT for me vessel, if there is such a thing? My boat is vat exempt, and this year im planning a trip to France so will need to have the paper work completely spot on.
I can’t just tell the officials (she’s exempt) surely I need to prove it on paper?
Ide imagine im not the only yachtie with this question.

You could try the Revenue Commissioners to see if they have a cert that they'll issue, but I suspect both they and the French have more on their plate to worry about than whether a Shipman 28 is VAT exempt or not.

You need to be registered. It is expensive to get on the proper register but the ISA will do a cert for you. It goes something along the lines of "He says it is his boat so who are we to argue..." Makes the UK SSR seem overly bureaucratic. See www.sailing.ie. You could contact them to double check it's OK for France, but I believe that is the primary purpose of it so it should be.

Beware if the French check you they'll likely check the ship's radio licence and your quals for the VHF. That's a bit of a nuisance with an Irish vessel as the VHF exam is OTT, but to be honest if it were me I'd be more worried about that than VAT.

 

[Tranona]

Depends on whether you get "caught". If you had a boat in the UK that was purchased outside the EU then HMRC would be entitled to ask for evidence of VAT payment. If you were not able to produce it then they would charge you. This is just about the only set of circumstances where HMRC can collect VAT from individuals.

As for "stopping" in Greece, that would be irrelevant. The only thing that would deter UK HMRC is if your Bill of Sale and therefore the transaction was in Greece. I bought my boat in Greece (and paid VAT). However the Bill of Sale is from the Greek company to me and that determines where the responsibility of accounting for VAT lies.

You are much more likely to get "caught" in Greece because they have much more stringent controls over visiting yachts than in the UK.

Clearly there is always a chance that you can avoid the authorities - I expect there are many imported non-VAT paid boats in the UK, but the risk of being found out is always there and your market for selling is limited or price depressed. And BTW failing to pay VAT in these circumstances is a criminal offence.

 

[Boo2]

As for "stopping" in Greece, that would be irrelevant.

So stopping in Greece and importing to Greece are two separate things ? That does make sense.

The only thing that would deter UK HMRC is if your Bill of Sale and therefore the transaction was in Greece. I bought my boat in Greece (and paid VAT). However the Bill of Sale is from the Greek company to me and that determines where the responsibility of accounting for VAT lies.

OK, understood.

Boo2

 

[davey]

VAT laws on used boats

I think that someone is being artful here for as Emelda Marcos once said "Only the little people pay taxes". Do we see customs officials boarding container ships and oil tankers every time that they dock and asking to see the ships VAT receipt? Somehow I don't think so. As to the French they certainly do have some strange laws as before long every car in France will be required to carry a breathalyser.

VAT was introduced in the UK in 1973 hence the purchasers of boats sold in the British Isles since that date will have paid VAT. The Labour government actually increased the rate of VAT on boats to 25% in the late seventies and whilst this increase was basically a grudge tax that was aimed at one politician in particular; it largely destroyed the UK boat building industry. One boat that I own does have the original receipt in the ships papers and the boat has been to France before. Many boats however do not have any ships papers at all. How is it possible to "matriculate" such a boat so that it will be acceptable to foreign customs people? The Treaty Of Rome is supposed to be about free movement of goods and services hence this VAT charging scenario on boats that may have been built in the seventies is looking like a scam to me. There is another VAT hurdle as well, its the where the boat was in 1992. Allegedly if one goes cruising for several years "they" will want VAT when the boat returns to the UK! Why?

 

[Tranona]

I think that someone is being artful here for as Emelda Marcos once said "Only the little people pay taxes". Do we see customs officials boarding container ships and oil tankers every time that they dock and asking to see the ships VAT receipt? Somehow I don't think so. As to the French they certainly do have some strange laws as before long every car in France will be required to carry a breathalyser.

VAT was introduced in the UK in 1973 hence the purchasers of boats sold in the British Isles since that date will have paid VAT. The Labour government actually increased the rate of VAT on boats to 25% in the late seventies and whilst this increase was basically a grudge tax that was aimed at one politician in particular; it largely destroyed the UK boat building industry. One boat that I own does have the original receipt in the ships papers and the boat has been to France before. Many boats however do not have any ships papers at all. How is it possible to "matriculate" such a boat so that it will be acceptable to foreign customs people? The Treaty Of Rome is supposed to be about free movement of goods and services hence this VAT charging scenario on boats that may have been built in the seventies is looking like a scam to me. There is another VAT hurdle as well, its the where the boat was in 1992. Allegedly if one goes cruising for several years "they" will want VAT when the boat returns to the UK! Why?

Not sure why you are making this post. If you want to know the background to VAT on boats and the "rules" that cover payment and evidence, I suggest you read the fact sheet on the RYA site (which is written with the help of HMRC), and if you want the "horses mouth" and have plenty of time to spare, the detail on HMRC VAT Notice No 8.

 

[jwilson]

Where can i get a certificate of exemption of VAT for me vessel, if there is such a thing? My boat is vat exempt, and this year im planning a trip to France so will need to have the paper work completely spot on.
I can’t just tell the officials (she’s exempt) surely I need to prove it on paper?
Ide imagine im not the only yachtie with this question.

The key date for VAT exemption in the UK is 1st April 1973, not 1985 as many people believe. I believe it is the same for Ireland. The 1985 date refers to "deemed VAT paid" ststus, which is slightly different, and has conditions.

The UK Customs will definitely not give you a certificate of exemption - all you have to prove is that the boat is older than that date. You may be able to find someone in Ireland who would write that the boat is exempt.

As others have said, in practice this simply is not a problem - as long as the boat is registered in your own country, whether UK or Ireland.

 

[Juggler7823]

Where can i get a certificate of exemption of VAT for me vessel, if there is such a thing? My boat is vat exempt, and this year im planning a trip to France so will need to have the paper work completely spot on.
I can’t just tell the officials (she’s exempt) surely I need to prove it on paper?
Ide imagine im not the only yachtie with this question.

Am I missing something here? Benlui gives his location as Cork, Eire. He does not specifically say where his boat is located but he talks of sailing to France (from Cork?). Is his boat Irish registered? What is his nationality? Only DT4134 has mentioned the Irish Revenue commissioners and ISA in post #10. If this is correct all this talk of HMRC, RYA, UK etc is totally irrelevant.

 

[Tranona]

If this is correct all this talk of HMRC, RYA, UK etc is totally irrelevant.

Not at all. The rules are exactly the same throughout Europe with the only exception that the qualifying dates may be different reflecting the different times the state joined the EU - but pretty sure Eire and UK are the same. Some states do indeed issue some form of certification, usually because they have a compulsory registration system that requires the submission of the original VAT invoice. UK does not issue certificates because VAT status can change over time and the only real record is the original invoice. Boats that are deemed VAT exempt are simply required to provide the alternative evidence that meets the conditions for exemption (if asked - rare).

 

[Juggler7823]

Irrespective of what you say, the only authorities who can give definitive views are the Irish Revenue Commissioners and the ISA

 

[Deleted member 36384]

Irrespective of what you say, the only authorities who can give definitive views are the Irish Revenue Commissioners and the ISA

I have experience of "definitive" views from HMRC, in writing, after requesting advice on VAT. Five years later the Company I was working for was instructed that the written advice was wrong. It was to do with the calculation of VAT and customers deposits paid many months ahead of the service being delivered.

 

[BrickSailor]

Do we see customs officials boarding container ships and oil tankers every time that they dock and asking to see the ships VAT receipt? Somehow I don't think so.

I wouldn't be in the least bit surprised if they do. We regularly have to produce VAT (and other) paperwork for aircraft in Europe. Virtually never anywhere else in the world, though...