Ex-VAT with the toys

[Deleted User YDKXO]

Re: further detail on Deleted User\'s points

Good points, jfm, although I've heard that UK C and E are pretty clued up on used boat values. Presumably, they trawl through the back pages of MBY like the rest of us

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[tcm]

Yes. The leasing company is french, and is co-owner of the boat (co-proprietaire) in the french registration document (orange book) with you as owner (any nationality) also named. This way it obeys french law for registration, namely that that the owner (or one of the owners) is french. Once the lease is paid off, a final peppercorn buys the boat and then it's a vat-paid boat in your name. Of course, as soon as it becomes your boat then you have to re-reg in the UK, if you're a brit. not that the drawback of a french lease is that's it's french registered - which means french sailing tax is due - €10k for mine per year. Hence i am planning to settle and reregistering this year, not the following year. Overall, i have still paid a bit less than 100% of the vat incl boat so the interest rate as been a bit less than 0%.

If buying a boat from a french person, the leasing company is clearly named in the document and the reg number etc so much easier to chase down thatn dodgier UK stuff where the mortgage/lease company might be anyone.

Leasing-wise, some people (often the ones offering more complicated luxembourgy vat-saving deals ) say it is a bit risky to have the boat part-owned by a big leasing company - cos it's one of their assets if some er massive fifnacial diaster befalls them. But i think this is a tiny risk really.

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[tcm]

Re: further detail on Deleted User\'s points

um, yes. But those are asking prices. For example, jfm has got the much-hated blue hull with ghastly cherry wood interior, and yours is an ancient discontinued obsolete T48. Mine is even worse as it a one-off with not even any fitted carpet in the saloon, hence almsot valueless.

Note also that the market can be bucked: when the time comes to sell, put in 3 adverts for rather expensive models exactly the same as yours with non-working phone numbers. I did the reverese of this in the sunday times when trying to buy a 2nd hand merc - put in 3 adverts for the models i wanted but 15% cheaper than all the others. Next week all the prices came down. I think the sunday times help lines also had a bit of a frying with several thousand essex car dealers trying to find the "real" telephone numbers. These same sort of dud adverts, if adverts is all that it takes, could also demonstrate the hopelessly low value of a particular boat. If this is legal, then i wd think it is only just legal.

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[tcm]

don't think so - that's what vat is there for - to be paid by everyone and collected from companies. So if boats were made of mud in a field, then Mr failrine wd charge everyone whatever it cosat to make the mud into a boat PLUS vat. Then Mr Taxman comes along and says rightyho you have have a gross profit of 1millon therefore make sure I get 175grand, and he gets a good kicking (or normally a fine) for not paying immediately.

Boat companies can only NOT charge if they sell to another company somewhere else in a different VAT regime - like channel isoland frexample. So anyother company wd get charged vat.

So then, the other company (like a bopat instructy compnay if it bort a new boat) would get charged vat. BUT it could claim that the boat was a business expense as they needed it for work, hence claim the vat back. And the taxcman mite say ah but you use it yerself. And the the boat compnay says ooh no i was just testing to see if it all okay, i hate boating really. So then they get all the vat back.

But i don't really see a way for an individual to do it. There is no mechansim for an eu national to claim back vat, is there?

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[Seven Spades]

Don't jump on me... but if you go to Jersey and buy a boat and bring it back, how would anyone know whether it was VAT paid or not?

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[jfm]

Careful.......

But they do random checks, and if you can't prove, then they get suspicious, then they check proply and find out it's not VAT paid. Then they send you to jail. Literally.

Also, when you sell it, the buyer might make enquiries and if you cant prove, buyer might walk away. And if disgruntled because he wasted £500 survey fee, he might shop you.

Point is, it is actually illegal. 90 or 99% of time you might get away with it, I dunno. But if you are caught, it isn't like speeding, you go to jail. And if a director or various professional, you get a bit struck off!

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[MainlySteam]

Re: Careful.......

Have been told both over in UK and here that a "nice" boat is one of the tax audit initiating flags. Within 3 months of our boat being launched (custom built 41 foot yacht) I had a tax audit and it was definitely driven by "Self employed, new boat, this looks good, if we shake this guy hard enough something is sure to fall out". Nothing fell out after severe shaking and threats (like "If you don't tell us about undeclared earnings we will just audit some more years"), but it sure gave me a big accountant's bill.

John

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[cliffdale]

Re: Careful.......

When does the boat become an import? If the boat is kept at St Helier on an annual basis, winter the boat in the CI, but cruise UK waters for 5 months, have you imported the boat?

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[tcm]

Re: yes, and.......

other companies are also a trigger So, for example, farm equipment sales outlets are combed carefully, to established which farhemrs have been buying/renting loads of kit, hence must be shakeable. Likerwise, chip fat suppliers give a good indication of which fishnchippies are making a fortune. Well, no they don't cos all the fishnchippies pay cash. but erm anyway.

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[Seven Spades]

Re: Careful.......

"Have been told both over in UK and here that a "nice" boat is one of the tax audit initiating flags. Within 3 months of our boat being launched (custom built 41 foot yacht) I had a tax audit and it was definitely driven by "Self employed, new boat, this looks good, if we shake this guy hard enough something is sure to fall out"

Are you are suggesting that the IR are collecting lists of buyers of new boats or and boats and if so how would they compile such information, from the marinas?

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[tcm]

Re: Careful.......

From inspecting the records of a boat reseller, perfectly legal.

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[MainlySteam]

Re: Careful.......

Yes - plus they gather intelligence from the audits of others. Also, a custom build may appear in magazines. Maybe inspecting the Register of Ships from time to time?? Other tactics for general, not boat, example - the tax people out here are doing a special troll through what they call wealthy individuals at the moment (so, also, those who have done business with those pepole may be trolled through to for intelligence or implicated), review newspaper ads to identify people offering private services (prostitutes, boat deliveries, etc), make retail purchases to see if the money goes in the till or under the counter, etc, etc.

The telling one - businesses often get requests (actually demands) for information from tax office simply to substantiate the records found in audits of others. I did a corporate recovery of a marine business and we got one such request one day and one of the employees said "I know that guy" (the one the information was being collected about). So that guy got a friendly private phone call to see what was going on. That guy maintained he knew nothing at all about the tax people investigating him.

John

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[jfm]

Re: Careful.......

<<businesses often get requests (actually demands) >>

These are only requests. They might be expressed as demands, but that's a tactic. So you can ignore them.

Inland Revenue can only force person A to give information on person B if
1. A commissioner authorises it (commissioner is kind of a lowest court tax judge);
2. The demand is only for "documents" not merely information; and
3. The tax inspector writes to B to lettim know what's happenin.



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[BrendanS]

Re: Careful.......

I suspect many would simply provide the information, rather than worry about being targetted for a time consuming and expensive inspection.

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[jfm]

Re: Careful.......

Yes, you're right. Although best tactic with IR imho is know the law really well (or get someone who does) and make IR follow the rules properly. You are taxed by the law, not these people. Never ever be intimidated by them, despite intimidating style. Difficulty is, many tax advisers dont know how to do this terribly well and it is imho spensive!

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