No vat receipt when buying - help please

Perhaps you could get the seller to take out indemnity insurance? This would indemnify you and any future owner of the boat against irregularities in the VAT status.

I suggest this because I had a slightly analogous situation on selling my house recently. I'd had a conservatory built; the builder reckoned it was to current building regulations, but the purchaser had doubts. As the reason for the doubts was in technicalities, it could not be resolved definitely. So, my solicitor suggested I take out a one-off indemnity insurance to cover it. The insurance was very cheap - a few tens of pounds - and sticks to the property forever (or at least, until some statute of limitations on building regulations runs out), so if there is ever any problem arising in the future, the insurance will pay out.

Given that it is unlikely in the extreme that there would ever be any comeback, I can't imagine that such insurance would be expensive. Solicitors seems to be very up on this sort of thing; mine regarded arranging it as utterly routine.
 
This is a pathetic situation we are in but the op needs to wise up to the potential nightmare on resale. Who's going to bet that the EU have seen sense by then? What's their track record like :rolleyes:
 
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Frankly, if we knew who the original dealer was... And the name of the 1st buyer... It shouldnt be that hard to whip up a vat invoice for the required....
 
jimi said:
I think if the Douane in France ask for paperwork and it does'nt exist then it could turn out to be rather more than a perceived problem. There must be some way for the C&E to provide paperwork .. or even the original manufacturer may have invoice copies?
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That is the issue. If the OP buys the boat and the French Custioms want to see proof of VAT payment it could get nasty, and UK Customs and Revenue will not help. This is the seller's problem, and if the OP buys the boat it becomes his problem.
 
Can anyone say the kind of money we mean if this goes wrong ?

Is their a set amount ? or can it be a varied amount at the authorities discretion ?

Any chance of a ball park figure ?
 
If the broker went bust, is there any knowledge of who the liquidator was? They may have retained the records .. very long shot but maybe worth a try?
 
zambant said:
In process of buting a sailing boat and have a significant problem suddenly raised its head.

Buying from the original owner who purchased the boat new in 2002.

His house burnt down - destroyed all paperwork including the original bill of sale.

The dealer who sold the boat went bust in 2007

What the hell do I do? He wont drop the price by 20%....

Really dont want to walk away but do want to take it to Europe ocassionally

Please....someone....help?!

John
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The cynic in me would say, "how convenient". Are you sure the boat has ever had VAT paid on it?

Has the seller been able to provide you with absolute proof that his house burnt down? It might at least help put your mind at rest as to the seller's integrity, although this won't help you much if you're ever asked for proof that VAT has been paid...

If it were me I'd want a 20% discount or I'd walk.
 
Other risks

Personally if you like the boat I wouldn't get too concerned about the VAT situation-particularly if you intend to keep it for some time. In practice HMRC are not going to pursue you (no chargeable event has occurred) and provided you have a bill of sale and it is not a shiny new motor boat it is highly unlikely foreign officials will be that interested-and if they do ask the bill of sale should point them back to HMRC. I would go for a stat dec from the owner confirming that it was VAT paid but the invoice was lost in a fire, dealer no longer trading etc together with an indemnity in the sale contract and enjoy the boat!

In practice you are far more at risk of having an engine, rig, hull issue etc to sort out than of having to fork out for VAT where you have not been involved in a chargeable event. Far bigger risks than lack of a VAT certificate when purchasing an "preused" yacht in my opinion.
 
jimi said:
If the broker went bust, is there any knowledge of who the liquidator was? They may have retained the records .. very long shot but maybe worth a try?
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Partly replying to your earlier post. There is no central record of VAT payments - how could there be? VAT is a tax on transactions. The seller keeps a record of all the VAT he has paid out and all the VAT he has received, takes the first sum away from the second and sends a check to HMRC. The only record that ties a receipt of VAT to a particular transaction is the commercial invoice. The seller is only required to keep records of VAT for 6 years - and only to show that he has properly accounted for it.

There is nothing that ties a VAT payment to a boat other than the invoice, which in itself only has to give sufficient description to show that VAT is correctly applied. It is not a tax on the boat, and does not have to be shown to register a boat in the UK. Nothing is required for part 3 but a record of title (Bill of Sale) is required for Part 1.

All this is made very clear in the FAQ information sheet compiled by HMRC and the RYA and is on their website. HMRC also make clear they would not normally pursue an individual for VAT, simply because in normal circumstances an individual cannot commit a VAT offence. The one major exception as far as boats are concerned (and any other asset) is if a boat is imported from outside the EU when the individual is responsible for paying VAT direct to HMRC, who issue a receipt. There is no other record of payment - HMRC do not keep a copy.

So, the reality is that HMRC cannot pursue individuals if there is a record of every transaction showing that the boat is owned by a private individual and has changed ownership between private individuals and kept within the EU. In this sort of situation (which applies to the majority of private boats) the only person who can have committed an offence is the trader who originally sold the boat to a private individual as he was responsible for accounting for VAT.

All this is well known and accepted, but it suits some people to just state the "headline" about the requirement to show proof of VAT payment, rather than explain what lies underneath it. HMRC themselves admit they can never be sure about whether VAT has been accounted for in relation to a boat, not just because there is no definitive record, but because VAT "status" can change over time in relation to an individual boat because of different transactions it might be involved in.

The real concern of many people is what happens in other countries. Officials may well ask for proof of VAT payment, but the advice given in an earlier post suggesting that you keep records that the boat has always been in the UK and changed hands here is sufficient to show that any VAT issues are the responsibility of UK authorities, or the authorities in the state where the last transaction took place. Invariably when there are questions asked about VAT it is because the boat has been imported, it is owned by a corporate body or is owned by a leasing company - as these are the sort of situations where VAT offences can occur.
 
I wouldn't list it if it came to me because I would not want to sell it in with such big holes in the history-Clients come to me knowing that I have looked into the documentation.

If you went out of the EU and re-entered you could well have a problem.


"Grey" boats, with regard to documentation, are coming under more scrutiny from officials. You may not get hit with the VAT in a foreign port but you may well be investigated or, as in some recent cases, be asked to leave.

It is less of a problem with older boats but 2002 is relatively new and could raise an eyebrow.


Ironically the next purchaser you sell it on to who wants a loan to buy it may be the one with the most difficulty, as in the last few years lenders have refused to lend with missing VAT documents and/or original history.

If the boat is registered the person who registered should be able to apply for certified copies of the supporting documentation used when first registering. That may be the best way forward.
 
photodog said:
Frankly, if we knew who the original dealer was... And the name of the 1st buyer... It shouldnt be that hard to whip up a vat invoice for the required....
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As the original company are no longer, and it's impossible to obtain copies because none exist, and as HMRC don't keep records this is the obvious solution. You just want a bit of paper to wave in front of some officials nose.

Suppose the seller actually had a bill of sale - how would you go about proving it was genuine? Sounds to me as though it would be impossible in this case.
 
jimi said:
I think if the Douane in France ask for paperwork and it does'nt exist then it could turn out to be rather more than a perceived problem. There must be some way for the C&E to provide paperwork .. or even the original manufacturer may have invoice copies?
Click to expand...

There genuinely is no way for HMRC to look back and check if VAT was paid on a particular boat. All they got back in 2002 was a lump sum from the builder probably covering the VAT on several boats over a period.

For various reasons loss of original VAT paperwork is incredibly common, though a ten year old boat will usually be expected still to have it. By the time you get to 1973-1990ish baots there are probably more boats with lost VAT records than still have it. In practice it is not usually a problem.

HMRC can only charge VAT if they can PROVE that a chargeable event took place, and that they were not paid. A private sale is not a chargeable event, and their records don't prove or disprove the payment when the boat was new.
 
One other point that has not been mentioned is

Does this boat actually belong to the person selling it?

If there is no documentry evedence have you checked with insurance companies

Just a thought
 
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