No vat receipt when buying - help please

[Deleted member 36384]

..... 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. ...

Maybe people in your profession should get together and sing from the same hymn sheet and develop a united front that is more realistic. That doesn't mean ignoring the issue or blindly stating that it will be okay on the night. I feel its your profession that is contributing to this mess, don't take that personally please.

If I was more paranoid than normal I would think that you have a vested interest in depressing the market in second hand boats by making them unsellable and thus creating a premium market in VAT compliant boats for the gullible. Come the revolution, we will see how far a VAT receipt will get you!

 

[gjgm]

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!

Well, you say NO, but the only reason for an increase focus would be
1. Incidences
2. lack of understanding.

Since we cant prove 1. at all, then 2 seems of our own making, to me.
I can see why a finance house might want some assurance that there isnt a liability (VAT being one) on the asset they are lending against, and fair enough on that point but I think the broker angle is void. The original VAT invoice does not prove the current VAT status of the boat. The broker ought not to be suggesting it does.
Has the boat been smuggled? Has the boat been owned as a charter?
If you can answer No with reasonable confidence to both of these, I dont think there is much reason to fuss.

 

[prv]

If I was more paranoid than normal I would think that you have a vested interest in depressing the market in second hand boats by making them unsellable and thus creating a premium market in VAT compliant boats for the gullible

Erm, except that Jonic sells (exclusively, as far as I know) second-hand boats.

Pete

 

[jimi]

I have spoken to someone who spent the night in jail in Greece because they did'nt have the appropriate papers and had to have them faxed out from the UK before they were released.

 

[Tranona]

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?

Registration and VAT are essentially two different things. Registration is only required to show the flag state of the boat, in the same way as your passport shows your citizenship. It is nothing to do with the EU per se, but is an international requirment. You can have a boat registered outside the EU and still have VAT paid. Equally you can have a boat that is registered in the EU (or UK) and VAT not been paid - because it was exempt, deemed VAT paid, had been imported under one of the special exemptions or is owned by a VAT registered entity as a business asset and VAT has been reclaimed.

The message should have got through that the chances of a foreign official making an issue out of lack of VAT proof (or even asking to see it) is very, very small. They may do so if they believe an offence has been committed. An example would be Flavio Briatore's run in with Italian customs a couple of years ago with his Cayman Islands registered boat. He claims it was not his, but a charter boat and was exempt. Customs disagreed and impounded the boat claiming 1.3m Euros. Got sorted out, and guess his lawyers were smarter than customs lawyers as he still owns the boat and has still not paid any VAT.

There are two different worlds, one inhabited by the Briatores and other wealthy people where the opportunities and rewards of avoiding taxes are worthwhile, and the other world inhabited by the rest of us. Broadly speaking customs officials are more interested in the inhabitants of the first world.

Although they won't say so in public, Customs across the EU know about the inconsistencies and ambiguities in VAT and the difficulties of policing the rules, so don't waste their time trying to do it. This can vary according to location and clearly where you have EU ports that are adjacent to non EU states you might expect customs to be more vigilant because the chances of illegal acticity of all sorts are higher than elsewhere. Typical would be France/Channel Islands, Spain/Gibraltar, Italy/Croatia, Greece /Turkey.

If you can get title sorted out on the boat you want to buy, then don't worry too much about lack of VAT paperwork. Follow the RYA advice and keep records that the boat is/was UK based, register on the SSR, make sure you have your radio licence/certificate, and ICC and translations of your insurance certificate and you will have no problems travelling around Europe.

 

[Tranona]

Well, you say NO, but the only reason for an increase focus would be
1. Incidences
2. lack of understanding.

Since we cant prove 1. at all, then 2 seems of our own making, to me.
I can see why a finance house might want some assurance that there isnt a liability (VAT being one) on the asset they are lending against, and fair enough on that point but I think the broker angle is void. The original VAT invoice does not prove the current VAT status of the boat. The broker ought not to be suggesting it does.
Has the boat been smuggled? Has the boat been owned as a charter?
If you can answer No with reasonable confidence to both of these, I dont think there is much reason to fuss.

It is your number 2.

The point is that VAT is not "simple". It is complex and ambiguous, but is reduced by HMRC to its simplest form - that is the two statements that EU boats are required to show evidence and the only evidence acceptable is the commercial invoice. That is their message - both statements are true.

Not everybody appreciates the level of complexity that underlies those two statements and HMRC make no attempt to explain, so that is all that sticks in the public's minds.

 

[Deleted member 36384]

Erm, except that Jonic sells (exclusively, as far as I know) second-hand boats.

Pete

Au contraire, avatar prv! Reduce the supply, increase the price for the available demand. Coming back down to earth, of course that's not the plan, providing a service for selling compliant boats is.

HMRC should just issue a VAT paid status certificate to all private boats older than some date and be done with it, draw a line under the issue. That will never happen just as no one is likely to demand proof of the fuel allocation on a private boat using red diesel.

 

[jonic]

Maybe people in your profession should get together and sing from the same hymn sheet and develop a united front that is more realistic. That doesn't mean ignoring the issue or blindly stating that it will be okay on the night. I feel its your profession that is contributing to this mess, don't take that personally please.

If I was more paranoid than normal I would think that you have a vested interest in depressing the market in second hand boats by making them unsellable and thus creating a premium market in VAT compliant boats for the gullible. Come the revolution, we will see how far a VAT receipt will get you!

You couldn't be further from the truth if you tried!

I am actually laughing.

For a start I only sell second hand boats.

We would love to not have this problem, it adds endless unnecessary difficulty to our job. And our profession has lobbied long and hard, as have the RYA, to get the powers that be to change the system!

But the fact is we would be pulled up for NOT letting clients know that without the required evidence they could have problems, as Jimi's friend did.

It's a mess, but it was never caused by brokers. We Bl&^&dy hate it

 

[jonic]

HMRC should just issue a VAT paid status certificate to all private boats older than some date and be done with it, draw a line under the issue. That will never happen just as no one is likely to demand proof of the fuel allocation on a private boat using red diesel.

In a sense that was done via this:

Certain vessels that were in use as private pleasure craft prior to 1 January 1985 and were in the EU on 31
December 1992, may be deemed VAT paid under the Single Market transitional arrangements. As Austria,
Finland and Sweden joined the EU later, the relevant dates for vessels in these countries are ‘in use’ before 1
January 1987 and moored in EU on 31 December 1994.

After this date there were no further transitional arrangements agreed by the EU Commission for subsequent
EU expansions.

The following documents are useful to prove the age and location of the vessel:

For age:

Marine survey
Part 1 Registration
Builders certificate
Insurance documents

For location:

Receipt for mooring
Receipt for harbour dues
Dry dock records


You used to be able to have HMRC provide a VAT opinion letter but those were deemed illegal, so they can no longer issue them. We are left with the system of original documents- which are unverifiable any way

Not a real problem in home waters but a possible issue in foreign ports.


The risk is small but because it exists, us, the RYA or HMRC can't categorically state. "No problem you will be fine." Which I can assure you is extremely frustrating.

 

[Deleted member 36384]

You couldn't be further from the truth if you tried!

I am actually laughing. ....

Excellent The evil machinations of International Yacht Brokers can be denied, but the truth is out there.

 

[jonic]

Excellent The evil machinations of International Yacht Brokers can be denied, but the truth is out there.

 

[jonic]

Come the revolution, we will see how far a VAT receipt will get you!

What time does it start, and count me in

 

[jonic]

Sue Grant of Berton wrote an interesting piece on the problem, noting how it affects the various sectors in the yachting community.

Google Berthon and VAT.

 

[westernman]

HMRC should just issue a VAT paid status certificate to all private boats older than some date and be done with it, draw a line under the issue.

They can't. They don't know whether VAT has been paid or not!

 

[zambant]

Revolution - count me in

 

[jonic]

Revolution - count me in

Its alright we already have. Whilst you were out we voted to all go to France in your boat

 

[zambant]

Its alright we already have. Whilst you were out we voted to all go to France in your boat

Cool - we can water ski behind my Centaur

 

[Rivers & creeks]

In a sense that was done via this:

Certain vessels that were in use as private pleasure craft prior to 1 January 1985 and were in the EU on 31
December 1992, may be deemed VAT paid under the Single Market transitional arrangements. As Austria,
Finland and Sweden joined the EU later, the relevant dates for vessels in these countries are ‘in use’ before 1
January 1987 and moored in EU on 31 December 1994.

If a VAT receipt is an unreliable piece of paper then what is a 20 year old marina bill for new years eve 1992 going to look like?

The Kipper was built in 1977 and part one registered. I don't have a marina bill from 1992 so I guess i'll have to take my chances over the VAT.

 

[sailorman]

If a VAT receipt is an unreliable piece of paper then what is a 20 year old marina bill for new years eve 1992 going to look like?

The Kipper was built in 1977 and part one registered. I don't have a marina bill from 1992 so I guess i'll have to take my chances over the VAT.

JB is 1979, we have a sworn Affidavit that she was where ever in Holland on what ever date & is classed as VAT exempt

 

[Ceejay]

Possible solution

Just jumped from the foot of page 1 to the latest page here, so have missed out a lot of the discussion. Surely it must be possible to order an invoice by way of a forgery, online.........or even just make one up yourself.