First Boat Advice Please (and VAT)

[Andymap]

Hi All

I'm in the process of buying my first boat and need a little help.

I've done a deal on a Jeanneau 34 HT (2007). The problem is that it now seems the owners can't prove that VAT has been paid and my finance Co are jittery. My worry if I proceed is that I may have an issue when I come to resell. Thoughts??

Alternatives are as follows:
Another Jeanneau 34 (2005) - I'm now wondering if she will be too small for weekends away with the Mrs and 2 boys;
Bavaria 37 Sport (2004)- seems massive. Too big for a first timer? I like it but need the owner to shift a little more on price;
Sealine S37 (2002)- more expensive than both of the above and slightly older.

All advice gratefully received.

 

[rafiki_]

Welcome Andy.

The onus is on the seller to produce proof of VAT. If this is not available, then the problem transfers to you, and I would avoid this if it were me.

You have a nice selection of boats, but I am guessing your budget, so cannot really comment.

There are 2 or 3 S37 owners on here, and they might give you a realistic valuation.

Any boat is going to feel big the first few times out, especially when mooring. Best to get good training when you start, as this will build your confidence.

Eventually any boat will not feel big enough!!

Good luck.

 

[neale]

Andy

The VAT issue is massively over stated, it's actually a non problem. A search on this forum will provide lots of information about why. The problem is that your finance company want it and to be fair, on a 2007 boat I think I would prefer to have it rather than not.

If the seller can't provide it and you feel uncomfortable without it or your finance company won't proceed without it, there are plenty of other boats out there.

While a 37 foot boat may feel massive, it isn't much bigger than a 34 and trust me when I say that you will very quickly grow into it.

To my mind a 34 foot boat is big enough for 2 + 2, but a 37 will feel a bit more comfortable.

 

[Tranona]

With a boat that recent it should be possible to go back to the dealer who sold it originally as he should still have a record of the VAT invoice - assuming he is still in business. However, it is the current owner's responsibility to provide the evidence. If it is for sale through a broker, he should be making sure he gets the paperwork in order.

As already suggested, assuming you can show that it was always in the EU and not owned at any time by a VAT registered business there is no real problem except for the difficulty in getting finance against it which does limit its market and potentially affect its value.

 

[PCUK]

Final alternative is to get the seller to drop the price by the amount of VAT to be paid. This may be his only way of selling it. Don't believe this is a minor issue by any means.

 

[Tranona]

Final alternative is to get the seller to drop the price by the amount of VAT to be paid. This may be his only way of selling it. Don't believe this is a minor issue by any means.

Unless there is a possibility that the boat is an illegal import, there is no way that the buyer can be liable for VAT so your suggestion is illogical. The impact on value is mainly related to the difficulty in raising finance secured against the boat.

 

[jrudge]

not so sure about that. If you get boarded and asked for a VAT receipt ( it has happened to me in France - they were charming) and you cant produce one I rather suspect it has just become your problem.

There are plenty of boats out there that can prove their VAT status.

Buying a boat tax free is really not that difficult, just buy it in Jersey - so "illegal import" conjures up images of cloak and dagger, but Jersey is only a 3 hour or so trip away.

Will someone ask for the VAT receipt? One things is gteed ... the person you sell it to will, and then they will come onto the forums and the cycle will continue.

A 2007 boat is only 5 years old, so saying it has been lost in the dusts of time does not really ring true.

I used to run a well known marine finance company and without tax status confirmed it was not something we would take on.

 

[birchwood330]

I have a lovely Birchwood 330 Challenger for sale and have the original invoice to prove the Vat has been paid !! Cheeky I know.


I wouldnt purchase a boat without proof as it could easily come back and bite you.

 

[Nick_H]

As already suggested, assuming you can show that it was always in the EU and not owned at any time by a VAT registered business there is no real problem except for the difficulty in getting finance against it which does limit its market and potentially affect its value.

Does it matter if it was owned by a VAT registered business? If it was, then surely it was their responsibility to account for VAT correctly when they disposed of it, so there's no more risk to the buyer or subsequent buyers just because it has been owned by a VAT registered business?

 

[Nautibusiness]

Does it matter if it was owned by a VAT registered business? If it was, then surely it was their responsibility to account for VAT correctly when they disposed of it, so there's no more risk to the buyer or subsequent buyers just because it has been owned by a VAT registered business?

This Prestige 34 was privately owned and vat was paid on first sale however unfortunately the supplying dealer are no more and their administrators very unhelpful.

How do I know?
I was the salesman that sold the '34 to the original owners.

 

[SailorBill]

This Prestige 34 was privately owned and vat was paid on first sale however unfortunately the supplying dealer are no more and their administrators very unhelpful.

How do I know?
I was the salesman that sold the '34 to the original owners.

Prove it. If you can't then your comment is worthless and should be treated as such.

People have been asked to show evidence of VAT payment and referring French/Spanish/Portuguese/etc officials to a forum thread won't get you out of trouble!

Personally I would not buy a boat with no proof that VAT had been paid, unless the purchase price made it worthwhile paying the VAT separately.

 

[Nick_H]

This Prestige 34 was privately owned and vat was paid on first sale however unfortunately the supplying dealer are no more and their administrators very unhelpful.

How do I know?
I was the salesman that sold the '34 to the original owners.

I suppose it may be possible for you to sign an affidavit to confirm the above to help out the buyers who were good enough to purchase from you (if they are the current would be seller)? Not sure if this would be accepted by a finance company and/or subsequent buyers, but i'd have thought it probably would. It's not something I know much about though, and what risks, if any, are involved.

 

[longjohnsilver]

Slight digression but still VAT related, does anyone know how far back or when VAT on boats first applied? I know of several people, me included, who have bought boats manufactured in the early 80s with no VAT receipts. I didn't even think of this being an issue and nor did my buyer.

 

[Tranona]

Does it matter if it was owned by a VAT registered business? If it was, then surely it was their responsibility to account for VAT correctly when they disposed of it, so there's no more risk to the buyer or subsequent buyers just because it has been owned by a VAT registered business?

Yes, because the VAT from the original invoice might have been reclaimed and then not correctly accounted for when the boat was subsequently sold. In that case the original invoice is worthless. You need to see the invoice for the sale from the VAT registered business to a private individual.

 

[Tranona]

not so sure about that. If you get boarded and asked for a VAT receipt ( it has happened to me in France - they were charming) and you cant produce one I rather suspect it has just become your problem.

Can you explain what the "problem" might be?

 

[Nautibusiness]

Slight digression but still VAT related, does anyone know how far back or when VAT on boats first applied? I know of several people, me included, who have bought boats manufactured in the early 80s with no VAT receipts. I didn't even think of this being an issue and nor did my buyer.

We (brokers) attempt to prove vat back as far as 1985... it can be tricky.

Sailorbill: I think you missed my point.
I was (more or less) agreeing with what you have said.
I know the vat was paid, but without the dealer being in business and the administrators simply claiming to have incinerated everything it is rather tricky to prove.

NickH: I would be happy to offer such and know the first owner (not the owner now) well enough for them to be happy to do the same, but that means diddly as far as the finance co is concerned (and - assumption only- I suspect customs in various eu countries).


EDITED to add: I am not reselling the Prestige 34, but do have a vested interest in Andy's purchase plans.

 

[Tranona]

People have been asked to show evidence of VAT payment and referring French/Spanish/Portuguese/etc officials to a forum thread won't get you out of trouble!

Personally I would not buy a boat with no proof that VAT had been paid, unless the purchase price made it worthwhile paying the VAT separately.

There is no evidence that this happens. If the transaction took place in the UK it is of no interest to any other state. The only time they would be interested is if there was evidence that the boat had been imported from outside the EU.

Please explain how it is possible for a private individual to pay VAT "separately" on a boat he bought privately from another EU resident.

 

[Nautibusiness]

Yes, because the VAT from the original invoice might have been reclaimed and then not correctly accounted for when the boat was subsequently sold. In that case the original invoice is worthless. You need to see the invoice for the sale from the VAT registered business to a private individual.

Agreed! Very important to find the final and most recent VAT invoice in the trail.

 

[Tranona]

Slight digression but still VAT related, does anyone know how far back or when VAT on boats first applied? I know of several people, me included, who have bought boats manufactured in the early 80s with no VAT receipts. I didn't even think of this being an issue and nor did my buyer.

In general pre 1986 boats are considered VAT paid. You can get details on the RYA site of VAT Notice No 8 from HMRC.

 

[longjohnsilver]

In general pre 1986 boats are considered VAT paid. You can get details on the RYA site of VAT Notice No 8 from HMRC.

Thankyou, have looked at HMRC website but not RYA. That's helpful.