No vat receipt when buying - help please

[jonic]

You use a broker to NOT buy boats like that.

However in similar circumstances, vat receipts missing due to a fire etc , I have sourced certifiable copies and through painstaking detective work re-built title histories, but you have to know what you are doing.

 

[Bosun Higgs]

Try to find someone who will lend you his vat receipt from that dealer and then get to work with the word processor and produce yourself a copy. There is absolutely no way that any foreign customs man would be able to tell a genuine original receipt from anything you could produce but in any case the boat is vat paid ( make sure you have something from the seller confirming this) so you arent dodging tax. HMRC are not interested.

I would be astounded if you were ever asked for the receipt on a boat as new as yours is.

 

[photodog]

Thats what i would recommend... But... If the boat is stolen etc... And you have faulsified the documentation.... I suspect straight to jail...

 

[Bosun Higgs]

Thats what i would recommend... But... If the boat is stolen etc... And you have faulsified the documentation.... I suspect straight to jail...

Not sure what you mean. If someone nicks your boat, why are you at risk. And as for you buying a stolen boat, the vat receipt is irrelevant in proof of ownership. In fact it would make life easier if the boat were nicked - obviously it was the tea leaf who made the doc assuming plod had any way of finding that the doc wasnt genuine and were interested in it anyway.

It really is all very theoretical. Provided you can prove you bought the boat in a genuine transaction between two UK dwelling citizens, HMRC or UK plod arent interested. A sworn affidavit from the seller to say the boat was bought VAT paid and has not had vat reclaimed would cover that issue. And I dont for a minute think that UK plod would be interested in you presenting a home made doc to (say) a Spanish plod - how would they ever get to know.

But if the OP is too nervous to do this sort of thing or to simply ignore the issue altogether, he can only do one thing - walk away.

 

[shaunksb]

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

:

So what do you have if anything?


I sold my 2002 boat recently and although it was Part 1 Registered from new and all Bills of Sale from original importer through to me in order the guy bought it on finance and as Jonic correctly says the finance co will insist on original VAT invoice if they are providing a marine mortgage.

This could be the main practicle problem with not having one.

Having said all that mine looked like it came off Sage Line 50 and would have been about as difficult to forge as an MP's expenses claim.

In fact since the dealer who originally sold my boat has also ceased trading how do I even know it's genuine?


_________________

 

[Tranona]

Try to find someone who will lend you his vat receipt from that dealer and then get to work with the word processor and produce yourself a copy. There is absolutely no way that any foreign customs man would be able to tell a genuine original receipt from anything you could produce but in any case the boat is vat paid ( make sure you have something from the seller confirming this) so you arent dodging tax. HMRC are not interested.

I would be astounded if you were ever asked for the receipt on a boat as new as yours is.

It is the apparent lack of any evidence of ownership apart from the current owner's say so that is the problem. The VAT receipt is minor, but no BofS is a bit of a no-no. Might be better if it is Part 1 registered as at least there is a record of title.

 

[Heckler]

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.

Doesnt take long to set up a company on quickbooks!
Stu

 

[bbg]

The chain of Bills of Sale show each owner as EU resident with EU addresses, the boat had been out of the EU and I guess HMRC were not happy that the previous VAT payment still stood.

The point is there are often those on here who say HMRC will not be interested, but in the right circumstances they will be. And if there is no paperwork it can get sticky.

Had the boat changed hands while out of the EU? If so, importing it into the EU is the VATable event. Even if VAT was originally paid, and every owner was an EU resident.

A Brit resident selling a boat to another Brit resident in the UK isn't a problem. If they conduct the sale in Jersey, and then the new owner imports the boat to the UK, the import is VATable.

There must have been a VATable event for HMRC to charge the VAT.

 

[Deleted member 36384]

...... I sold my 2002 boat recently and although it was Part 1 Registered from new and all Bills of Sale from original importer through to me in order the guy bought it on finance and as Jonic correctly says the finance co will insist on original VAT invoice if they are providing a marine mortgage. .....

The "finance co" (Barclays Marine Finance) have not insisted for a VAT receipt or evidence as far as I am concerned for my vessel. They only wanted their interest noted with the Registrar for Part I.

 

[jonic]

The "finance co" (Barclays Marine Finance) have not insisted for a VAT receipt or evidence as far as I am concerned for my vessel. They only wanted their interest noted with the Registrar for Part I.

I have seen the opposite on several occasions- different (major) finance house

 

[Quandary]

I own a boat and someday will want to sell it, so my sympathy is with the vendor, it seems he has offered a good boat at a fair price but the purchaser is being advised that -
A particular broker would not touch it (fortunately there are others with a more positive attitude to these problems)
Some sailors suggest he should accept 20% less than it is worth.
Others sailors instruct the purchaser to walk away.
All because of a missing scrap of paper that is easy to reproduce and that in 40 years with various boats I have never been asked for.
I hope none of you ever suffer this misfortune, but if you do, take ten minutes to make a vat receipt before you put it on the market.

 

[Tranona]

I own a boat and someday will want to sell it, so my sympathy is with the vendor, it seems he has offered a good boat at a fair price but the purchaser is being advised that -
A particular broker would not touch it (fortunately there are others with a more positive attitude to these problems)
Some sailors suggest he should accept 20% less than it is worth.
Others sailors instruct the purchaser to walk away.
All because of a missing scrap of paper that is easy to reproduce and that in 40 years with various boats I have never been asked for.
I hope none of you ever suffer this misfortune, but if you do, take ten minutes to make a vat receipt before you put it on the market.

It is not the VAT receipt that is the problem, it is the lack of evidence that the person owns the boat and has clear title to sell it. This only comes from the Bill of Sale, which is also missing. How can anybody be sure of ownership if there is no basis for it? No registration, no means of checking outstanding finance etc. The current owner should have taken steps to deal with the loss of paperwork at the time of the fire - not wait several years until he wants to sell it - and then find nobody will take the risk with a high value non-documented boat.

 

[GrahamM376]

Whilst I can understand the purchaser's worry, in many ways it's a storm in a teacup. I have no original VAT documentation for current boat and have never been asked to produce it. Even if I had, it's had 4 different names since original purchase so what would the receipt prove?

All I have, is a receipt from Moody Brokerage for my payment to them. Their receipt has a VAT number on it, as will any brokerage receipt. Many invoices show VAT inclusive price anyway, without VAT being shown as separate item so, I think the brokerage receipt should be acceptable proof.

 

[jonic]

It is not the VAT receipt that is the problem, it is the lack of evidence that the person owns the boat and has clear title to sell it. This only comes from the Bill of Sale, which is also missing. How can anybody be sure of ownership if there is no basis for it? No registration, no means of checking outstanding finance etc. The current owner should have taken steps to deal with the loss of paperwork at the time of the fire - not wait several years until he wants to sell it - and then find nobody will take the risk with a high value non-documented boat.

+1

Most Brokers PI insurance will be invalid if proper due diligence is not carried out. No VAT history, no ownership history, no finance history. How can you conduct any due diligence?

As a broker you would have to get a prospective buyer to sign a waiver stating that he understood he would be taking on all risks from those three areas. You have a duty of care to advise them that they could be looked into for the VAT, a future finance company may not lend and that without a minimum of five years history it will more than likely not be accepted on Part 1 of the registry.


You can rebuild the title history and VAT history and I have done so in the past, with certified copies. I would consider that to be a positive attitude, and the only one a professional should take other than explaining all the risks.

As a broker you could NEVER advise fraudulently creating VAT invoices.

The recent VAT fraud by the Fairline dealer involved some of that didn't it?

And he's in jail.

The seller really needs to do something about this, the boat is not that old.

 

[Quandary]

It is not the VAT receipt that is the problem, it is the lack of evidence that the person owns the boat and has clear title to sell it. This only comes from the Bill of Sale, which is also missing. How can anybody be sure of ownership if there is no basis for it? No registration, no means of checking outstanding finance etc. The current owner should have taken steps to deal with the loss of paperwork at the time of the fire - not wait several years until he wants to sell it - and then find nobody will take the risk with a high value non-documented boat.

But the OP states that the vendor has been in possession of the boat for ten years since buying it new. If that is the case why should there be any doubt that he owns it: subject to meeting the guy and making a assessment of his veracity I would be content.
I went to Burnham one year and met two guys in the RBYC they took me out to a Sigma 33 on a mooring, one of them was very keen to sell, the only thing I knew of them or the particular boat was an entry as joint owners in the previous years Sigma year book , I had a look and went back to the bar put my check book on the table and told them my offer. After about 1/2 hour of debate they took the cheque and I owned the boat. We cobbled together a receipt on a piece of paper we got from the bar. Job done.
I meet people and decide to trust them or not, it has let me down once in a whole lifetime though that was on a bigger transaction than a boat with all the legal documents professionally prepared and authorised at some cost.

 

[Tranona]

But the OP states that the vendor has been in possession of the boat for ten years since buying it new. If that is the case why should there be any doubt that he owns it: subject to meeting the guy and making a assessment of his veracity I would be content.

Well, you are far more trusting than I think most people would be! We are talking probably £80-110k (guessing a bit fom what the OP was looking for) and he intends to travel around Europe so he will be asked regularly for paperwork.

Even ignoring that an asset of this value with no provenance is suspect. Would you really pay that amount of money for something you could never be really sure you own, and that somebody else could have a legitimate claim on? Nobody could register their title, nor raise finance against it.

Buying second hand boats has enough risks and uncertainties to consider without ignoring paperwork altogether.

 

[jonic]

The fact that all the documents are missing is the biggest red flag when taking on brokerage listings. The question has to be is a lender or other beneficiary holding those documents as security?

I have had perfectly plausible people hand me a sheave of photocopies and an SSR, claiming that's all there is, only for my own investigation to reveal the boat was still on finance and the finance co held all the originals. That is a fact.

Th Op's seller may be perfectly legitimate and a victim of circumstance, but it will not be without consequence for any new owner, even if it is just awkwardness in a foreign port when asked for VAT status, or difficulty selling on at a later date.

The VAT status system of carrying original documents is ridiculous but it's all we have and unfortunately unlikely to change.

Likewise there is no compulsion to register a boat for home waters use, or to even have a qualification or license, so no central register to check ownership. Which means original documents are the title. Again that is unlikely to change in the foreseeable future.

There is no "HPI" type register so again, possession of original title documents is paramount.

 

[srp]

We are talking probably £80-110k (guessing a bit fom what the OP was looking for)

and from another thread...

Normally use the RYA forms and they have served me well - but I'm about to buy a £70,000 boat privately. Now I can do some of the donkey work myself but is it worth my while finding a broker to do the sale for me in order that I can ensure all the paperwork is in order?
Thanks
John

In the light of those figures, there is only one option. Walk away.
There are too many boats for sale to waste any more time on this one.

 

[AntarcticPilot]

The fact that all the documents are missing is the biggest red flag when taking on brokerage listings. The question has to be is a lender or other beneficiary holding those documents as security?

Jon,

I suggested one-off indemnity insurance as a solution in an earlier post. The seller would purchase insurance for a one-off premium to indemnify the future owners against any liability arising from the unfortunate circumstances. I've had to use this for a house sale, which involved a high value transaction (probably much more than this vessel), to indemnify the new owners against a problem with building regulations. I'm a bit surprised no-one has picked up what seems to me a simple and relatively inexpensive answer to the problem. If, as most people here seem to be saying, the risk is low and in any case the liability is limited, I'd have thought that such insurance would be quite cheap - in my case (for similar values; perhaps rather more) it cost about £70. My solicitors regarded this as an entirely normal response to not being able to make paperwork clear.

If this works for house purchase, why can't it work in circumstances like this?

 

[jonic]

Jon,

I suggested one-off indemnity insurance as a solution in an earlier post. The seller would purchase insurance for a one-off premium to indemnify the future owners against any liability arising from the unfortunate circumstances. I've had to use this for a house sale, which involved a high value transaction (probably much more than this vessel), to indemnify the new owners against a problem with building regulations. I'm a bit surprised no-one has picked up what seems to me a simple and relatively inexpensive answer to the problem. If, as most people here seem to be saying, the risk is low and in any case the liability is limited, I'd have thought that such insurance would be quite cheap - in my case (for similar values; perhaps rather more) it cost about £70. My solicitors regarded this as an entirely normal response to not being able to make paperwork clear.

If this works for house purchase, why can't it work in circumstances like this?

I don't know anybody that provides that cover for boats. Maybe somebody would underwrite it?

The thing is with a house sale, and I have been in a similar position, if there are missing documents there is still the land registry to fall back on so the insurer has some comfort. Here it appears there is nothing and we have this to contend with.

EU residents should only use a vessel in the Community if it is VAT paid or ‘deemed’ VAT paid.
Documentary evidence supporting this should be carried at all times as you may be asked by customs officials
to provide evidence of your vessel’s VAT status, either in the UK or in other Member States. Documentary
evidence might include:

original invoice or receipt
evidence that VAT was paid at importation
invoices for materials used in the construction of a ‘Home-Built’ vessel.

I think he either looks elsewhere or acknowledges the risks......but I wouldn't recommend printing his own docs!

It may be possible to rebuild the paper trail and I have offered to try for him.