Hypothetical VAT question

[superheat6k]

If a boat is purchased in say the Channel Islands and then is imported to the UK VAT is payable at 20% the purchase price of the boat as a chargeable event.

Is it legitimate to separate all items of inventory into a separate transaction to minimise VAT liability on the boat itself, providing the value of the transaction for the boat can be shown to be reasonable, albeit minimal ?

VAT is not normally payable on secondhand goods (except boats), so would this apply to secondhand inventory ?

 

[capsco]

I would be very interested in how much you could possibly hope to save by going down this route.
Unless you intended to remove the "second hand engines" and bring these back as hand baggage.

 

[jfm]

Vat is chargeable on loose inventory the same as it is chargeable on a complete boat, so separating it out seems pointless, unless I'm missing your point

Vat isn't paid on the price you paid for the boat. It's paid on the value of the boat at point of importation. If same day, figures might be same of course. If you keep boat in ci for a bit them hmrc might accept a lower value at import.

 

[henryf]

If the Vat man was shrewd he would write in a clause whereby they reserve the right to buy the boat outright for your valuation when importing. That would result in more realistic numbers

If you manage to sell the idea JFM I want my usual fee....

Henry

 

[Neil_Y]

Not sure where you got the idea that VAT is not chargeable on second hand goods? It's my understanding that it is?