How do you prove that VAT has been paid?

[jimbaerselman]

A T2L document is used as part of a set of European Community documents when freighting goods between EU states and the UK HMRC advise that this document does not apply to leisure vessels. It is intended to prove that goods being traded within the EU and crossing borders qualifies to be traded internally. However, because Portugal and more particularly Croatia, have misinterpreted the meaning they have been demanding such a document as proof of VAT-paid status from visiting EU-flagged vessels.

Croatia has circularised all Italian harbour authorities (the document is on display in my marina office and in perfect Italian as everyone here who discusses it comments in surprise) that a T2L document will be required by all visiting EU-registered yachts to prove their EU community status. The RYA have posted a page on their web site on the situation: http://www.rya.org.uk/newsevents/news/Pages/DemystifyingCroatianrequestsforaT2L.aspx

As only shipping companies who are authorised to handle custom-relevant shipments can issue a T2L (now includes HMRC) it is bizarre and a distortion of existing customs regulations and also contrary to the spirit of open borders to expect a visiting yacht under free passage to possess such a document. This doesn't help when an official demands it because of a distorted interpretation passed down the chain of command - it can seriously spoil your day, if not your entire cruising plans.
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+1

Excellent summary, Barnacle.

For a complete summary of all paperwork issues for leisure boats "going foreign", check out the "Going Foreign" tab on my web site .

And for specific issues about VAT and "free circulation" proof (T2L) see http://www.jimbsail.info/going-foreign/docs-and-VAT#VAT

These pages are the basis for briefings I give to some demanding audiences at the Cruising Association - and they soon let me know if their experiences differ!

 

[pmagowan]

I wonder what happens with a homemade boat? I know you are liable for VAT if you sell it within 5 years but how, if abroad in this time, do you provide the sort of documents that keep an official happy? There will be no invoices, no vat paperwork, nothing. Maybe a photo album!

 

[sailaboutvic]

I wonder what happens with a homemade boat? I know you are liable for VAT if you sell it within 5 years but how, if abroad in this time, do you provide the sort of documents that keep an official happy? There will be no invoices, no vat paperwork, nothing. Maybe a photo album!

So I understand invoice showing VAT have Been paid on the part are prove that the boat is VAT paid , but God can you imagine the amount of invoices one would have to keep and carry around with you , I thnk this is where the T2L would be handy , showing X amount of invoice to HMRC once would do the job .
Althought it could be fun watching a custom officers face when you pull out two cardboard boxes of invoices and pass them on to him

 

[BrianH]

So I understand invoice showing VAT have Been paid on the part are prove that the boat is VAT paid , but God can you imagine the amount of invoices one would have to keep and carry around with you , I thnk this is where the T2L would be handy , showing X amount of invoice to HMRC once would do the job .

But as HMRC point out, a T2L document is not valid for a leisure craft, they only supply one to satisfy the deluded states that think it is. Most others would probably not find it listed on their check-list.

I think you are correct though, that a self-builder needs to keep every receipt for his materials and that, and that alone, is proof of VAT-paid of his completed vessel. A bulky document box will be needed to stash on board.

 

[Tranona]

The 5 Years is nothing to do with VAT but with the RCD. Correct advice for VAT is to keep receipts particularly for major components.