No vat receipt when buying - help please

[Tranona]

In his question the OP asked about VAT, he indicated that the seller had owned the boat since buying it new from a now defunct dealer in 2002, he has not since indicated that this in any doubt.
In any case the vendor will surely have some docs. marina accounts, yacht club membership, vhf radio registration, all sorts of stuff to verify the period of ownership, if more proof is needed. The seller will provide a document indicating that he purchased and paid vat in 2002. If any of this was untrue he would be committing fraud, which is a crime. The seller has a permanent address? If he is selling it to avoid an unfavourable split of assets on divorce etc. any dispute will be around splitting the proceeds of the sale, not dividing the boat. The OP is not going to be charged vat again in the uk and he does not need to provide proof if he goes abroad. If vat were for some reason to be due on the boat, it is owed by a previous owner not the purchaser.
This is the boat he wants to own and I presume the price is fair, so what problem does he have?
All the stuff about importation of boats from abroad, company ownership etc. are red herrings and just serve to heighten the confusion and irrational fear that surrounds this subject. This is not the only boat that has become separated from its vat receipt, hundreds change hands every year.
If HMRC were making second hand boat owners pay vat for a second time do you not think we would have had someone on by now to tell us about it.

You still seem to be missing the point. The lack of VAT invoice is a bit of a nuisance, but not a killer. The real problem is that the seller is not able to show that he has clear title to sell. All the other stuff is good evidence that the boat has been in the UK and perhaps that he has been paying the bills, but it is not a title document. All you will get if you buy the boat is a Bill of Sale with his signature on it saying it is his to sell and free of any charges - but no way of knowing whether that is true.

The importation explanations were in response to other questions and probably not relevant here. However, the issue of corporate ownership is. If the seller does not have a Bill of Sale showing that it was bought by him in a personal capacity there is still the possibility that it is owned by a corporate and the VAT has been reclaimed. Without the documentation you just do not know for sure.

You could pay the money, he could do a runner and then you could find it was all a pack of lies and the boat really belongs to somebody else. So, only worth doing if you are prepared to lose all the money - and guess it is the OPs life savings so he might find that a bit hard.

 

[jonic]

You still seem to be missing the point. The lack of VAT invoice is a bit of a nuisance, but not a killer. The real problem is that the seller is not able to show that he has clear title to sell. All the other stuff is good evidence that the boat has been in the UK and perhaps that he has been paying the bills, but it is not a title document. All you will get if you buy the boat is a Bill of Sale with his signature on it saying it is his to sell and free of any charges - but no way of knowing whether that is true.

The importation explanations were in response to other questions and probably not relevant here. However, the issue of corporate ownership is. If the seller does not have a Bill of Sale showing that it was bought by him in a personal capacity there is still the possibility that it is owned by a corporate and the VAT has been reclaimed. Without the documentation you just do not know for sure.

You could pay the money, he could do a runner and then you could find it was all a pack of lies and the boat really belongs to somebody else. So, only worth doing if you are prepared to lose all the money - and guess it is the OPs life savings so he might find that a bit hard.

It really can't be explained any more clearly than that.

 

[zambant]

It really can't be explained any more clearly than that.

So I wait with baited breath to see if the owner does contact jonic to see if its possible for him to pull the rabbit out of the hat.....

 

[Quandary]

I am not sure I am the one who does not grasp the point.
Jonic won't touch boats without an original vat invoice? I still contend that many boats do not have one and the dreadful problem arising seems a rare event.
Tranona on the other hand is concerned about proof of title, I agree that satisfaction as to title of any purchase is vital but the OP did not indicate that there was concern about that, just about the VAT.

 

[jimi]

I am not sure I am the one who does not grasp the point.
Jonic won't touch boats without an original vat invoice? I still contend that many boats do not have one and the dreadful problem arising seems a rare event.
Tranona on the other hand is concerned about proof of title, I agree that satisfaction as to title of any purchase is vital but the OP did not indicate that there was concern about that, just about the VAT.

I think the issue also is where one is likely to sail, if purely in the UK, the lack of a VAT invoice does not seem to be an issue. If outside the UK, then it does. Proof of title is , of course , relevant to all.

 

[westernman]

I think the issue also is where one is likely to sail, if purely in the UK, the lack of a VAT invoice does not seem to be an issue. If outside the UK, then it does. Proof of title is , of course , relevant to all.

No issue outside of the UK providing you have the original of your registration document on board (part I or part III) - i.e. proof that the VAT issue is the responsibility of the UK and not of the country being visited.

 

[jonic]

I am not sure I am the one who does not grasp the point.
Jonic won't touch boats without an original vat invoice? I still contend that many boats do not have one and the dreadful problem arising seems a rare event.
Tranona on the other hand is concerned about proof of title, I agree that satisfaction as to title of any purchase is vital but the OP did not indicate that there was concern about that, just about the VAT.

Quandary

Perhaps the thread has meandered a bit.

The problem is, and I have spoken to the OP, there is no VAT paid evidence, and no Bill of Sale from the dealer to the owner.

All there is, is the builders certificate showing passing of ownership from the boat builder to the dealer.

From the dealer onwards there is nothing. No proof of ownership, and no proof of VAT payment.

I am also speaking with the seller and we shall see what can be done.

 

[fireball]

So just in case some one wonders I'm the OP

Take the sharp knives away..... I'm looking to cut my jugular

So No VAT receipt, no original bill of sale when he first bought it - Both lost in his house fire poor bloke. Dealer cased trading. Receiver wont/cant be bothered to look through his records

It may have finance on it despite the owner paying for it in full

Cant do an HPI check on it....

May not even belong to him..

Why on earth do we bother to use a broker to sell the damm things?

My head just blew up - how the hell do we manage to buy boats?????

With a 2002 boat and dealer gone bust - it sounds like an AWB - if it is ... A stands for ANOTHER - ie there will be ANOTHER one out there for sale ... Not a BAV is it?

If the boat was priced highly competitively then I may be tempted to risk it - dare I say it - do as Photodog suggested (there will be plenty of these boats out there - all you need is a copy of another invoice to replicate with the correct details) - I'm not sure there is anything illegal in re-creating a VAT invoice?

As for going abroad - I've only ever been asked for SSR document - once they've seen that they're not really interested - I think it also helps if you're seen to be friendly and compliant

 

[Deleted member 36384]

No issue outside of the UK providing you have the original of your registration document on board (part I or part III) - i.e. proof that the VAT issue is the responsibility of the UK and not of the country being visited.

Your post reminds me of a foreign VAT situation I was briefly involved with. I sold a Wharram Catamaran, unfinished project, to a chap in Denmark. He collected the boat, the plans and materials on two trucks and took them back to his home. he subsequently finished the boat (to a very high standard with bulbous bows as well). However, the Danish VAT men wanted proof that VAT had been paid. I had handed the receipts for the materials over, he had the bill of sale from me, but none of us had a sales receipt for the original plans, as I had bought them second hand. However, the plans are numbered and I had wrote a letter to JWD (James Wharram Design), at time of selling, advising that I sold the plans and had transferred ownership to the Danish bloke. This was really for JWD records and tracking of boats built. I believe the final outcome was that the VAT status was verified on plans from JWD and materials from me, plus with the bill of sale, it all ended well.

I believe that the VAT situation in the UK on this matter for older boats is another one of those ridiculous situations (like red diesel) that HMRC has got themselves into and represents the complete mess that the UK administration is in. I don't really care about it and don't rate the risk as worth bothering about. However, a lot of fretting and hand ringing has resulted in a perception that big brother is going to pounce as soon as buyer of a second hand boat takes delivery. Its all a typical British B'ollocks reaction to another European generated problem that isn't really an issue. A bit like Spanish companies building British infrastructure, a mess of our own making.

 

[jimi]

No issue outside of the UK providing you have the original of your registration document on board (part I or part III) - i.e. proof that the VAT issue is the responsibility of the UK and not of the country being visited.

However is it possible to get resistration without being able to prove title? I presume if the vessel was part 1 registered then that actually proves title anyway. Dunno about requirements for Part 3 and if that is acceptable to foreign officials

 

[westernman]

However is it possible to get resistration without being able to prove title? I presume if the vessel was part 1 registered then that actually proves title anyway. Dunno about requirements for Part 3 and if that is acceptable to foreign officials

Part 3 is acceptable to foreign officials.
And it does not prove anything at all except that you have paid 25 pounds.

However, if you your yacht is brand new, 250ft long and was last seen flying a BVI flag when you came through the straights of Gibraltar and was then moored in Monte Carlo. If you then turn up in St Tropez with a SSR and UK Ensign, then customs officials may well take an interest (and not only the French ones).

 

[Tranona]

I am not sure I am the one who does not grasp the point.
Jonic won't touch boats without an original vat invoice? I still contend that many boats do not have one and the dreadful problem arising seems a rare event.
Tranona on the other hand is concerned about proof of title, I agree that satisfaction as to title of any purchase is vital but the OP did not indicate that there was concern about that, just about the VAT.

See Zambants post #58 on this thread. Quite clear there is no documentation, including no BofS.

If it was just VAT receipt and everything else was in order there would be less concern. A BofS from XYZ boat dealers to MrY, private individual in the UK, supported by evidence of payment of sums equal to the price of the boat including VAT at the time would be useful to deal with the VAT bit.

But in the absence of anything other than the sellers word, all the other possibilities are still open and a subsequent buyer can never be sure of clear title.

Hopefuly John will have better luck piecing togetther some evidence.

 

[jonic]

Well, we are getting there.

It's not perfect and the OP will have to take a view, but he's well informed.

 

[rogerthebodger]

A general question about VAT in the UK and EU in general

How long do VAT registered companies in the UK and other EU countries have to keep VAT accounting records for. In SA it is 5 years so VAT man cannot demand VAT records older than that. What is the situation in the UK.

I also agree the Bill of Sale is more important than the VAT receipt on a 10 year old boat.

 

[Tranona]

6 years.

 

[rogerthebodger]

If its only 6 years having no VAT docs on a 10 year old boat should not be an issue.

If any tax authorities have an issue with suspect that VAT or import duty is liable on a boat or any other item surely they must prove that VAT or duty is liable on the item and it it needs to be detained pending investigation the tax authorities must get a court order, if they think the tax authorities don't need one they must consider that they are above the law.

 

[jonic]

If its only 6 years having no VAT docs on a 10 year old boat should not be an issue.

If any tax authorities have an issue with suspect that VAT or import duty is liable on a boat or any other item surely they must prove that VAT or duty is liable on the item and it it needs to be detained pending investigation the tax authorities must get a court order, if they think the tax authorities don't need one they must consider that they are above the law.

A UK tax investigation can go back 20 years I think.

No individual records of VAT payments for boats are kept by UK customs, which is why the VAT invoice must be retained and stay with the boat.

To move freely in Europe a boat must be VAT paid and carry evidence that that is the case.

Its a poor system. Other countries have registration systems where to be registered VAT must have been paid. So the registration can become the evidence.

UK customs are not looking to pounce on boats with lost documents- but not having any can put the owner in a very difficult (almost impossible) position, when he comes to sell.

It is rare that a vessel will have a problem, but it is a risk. More so if the vessel leaves the EU and re-enters. It is difficult for any authority in the UK to give any guarantees as other member states will interpret the rules differently. So you have this grey area that makes life unnecessarily complicated and illogical.

The other problem with VAT on boats is they can lose their VAT paid status.

If a European sails out of the EU on his VAT paid boat, sells it privately to another European in the Caribbean and he sails back to the EU. VAT is due again

Anyway, the main problem with the boat on this thread is there are no ownership documents as well.

 

[gjgm]

UK customs are not looking to pounce on boats with lost documents- but not having any can put the owner in a very difficult (almost impossible) position, when he comes to sell.

I have wondered how much responsibility for that lies with these forums.
With almost zero incidence rate of any VAT-back claims, and even then only where HMRC has suspicions of some sort of fraud I suspect, we all bought and sold boats happily without too much worry.
Seems a bed of our own making.

 

[zambant]

However is it possible to get resistration without being able to prove title? I presume if the vessel was part 1 registered then that actually proves title anyway. Dunno about requirements for Part 3 and if that is acceptable to foreign officials

Part 3 ssr just proves you have paid £25 and may satisfy the eu officials but I don't know if you would still need the vat paid status proof?

 

[Tranona]

I have wondered how much responsibility for that lies with these forums.
With almost zero incidence rate of any VAT-back claims, and even then only where HMRC has suspicions of some sort of fraud I suspect, we all bought and sold boats happily without too much worry.
Seems a bed of our own making.

No, Although it does not help. As I suggested earlier the "fault" lies with HMRC in refusing to come clean with reality and insisting that the the need to provide evidence across Europe and the fact that the only evidence is a receipt are key requirements. This is then compounded by finance houses insisting on seeing the receipt, even though only a tiny minority of boats are bought with secured finance. This then prompts brokers' organisations to recommend their members protect themselves by ensuring themselves as far as possible that they see the document - and so it goes on.

It does all boil down the the fundamental problem that VAT is a tax on transactions and not on assets, but part of the legislation "pretends" boats are assets and requires evidence of tax payment, and even at times, such as the rules for VAT on private imports, re-defines imports as a transaction in order to "fit" into VAT legislation. Even then it is not calculated on "value added" but is simply an ad valorem tax, just like import duty, and evasion is treated in exactly the same way as evasion of import duty rather than using the penalties applied in VAT accounting offences.

Given all this confusion it is not surprising that people get into a state about it!