Original VAT Receipt

[GrahamM376]

Could you prove that your boat has never spent a couple of years in Norway or Guernsey?

Yes I can, as far as is reasonable. When the broker posted the boat documents and their receipt for our payment, the letter stated ...We can confirm that VAT was charged at 15% on the original owners purchase from ourselves in 1988. Since the vessel has been UK based since then it is VAT paid and in free circulation within the EC.

 

[JumbleDuck]

indeed it is a mess, but it is not possible to advise someone that no proof of VAT will not be a problem. Especially if they take the boat overseas.

The issue is maybe not so much "What could happen?" but "What actually does happen?". Have there been many cases of people being asked to prove VAT status, other than when - as in the example you gave - they have been trying to conceal a recent and chargeable event?

 

[JumbleDuck]

Yes I can, as far as is reasonable. When the broker posted the boat documents and their receipt for our payment, the letter stated ...We can confirm that VAT was charged at 15% on the original owners purchase from ourselves in 1988. Since the vessel has been UK based since then it is VAT paid and in free circulation within the EC.

That's not really proof, though, is it? That's just someone saying something.

 

[BrianH]

The issue is maybe not so much "What could happen?" but "What actually does happen?". Have there been many cases of people being asked to prove VAT status, other than when - as in the example you gave - they have been trying to conceal a recent and chargeable event?

The situation is not static and it would be complacent to judge the future on the past easy-going attitudes. It probably doesn't affect many UK yacht owners what happens in "a far away country between people of whom we know nothing" but if rumours of Croatia's increasingly aggressive demands for VAT-paid status from visiting EU-registered yachts since last year's EU accession are true it could spread to other countries with financial difficulties.

 

[davidfox]

Thanks to all for your replies and advice, anyone got a moody invoice circa 1987 so that I know what I am looking for..?

 

[Colvic Watson]

The issue is maybe not so much "What could happen?" but "What actually does happen?". Have there been many cases of people being asked to prove VAT status, other than when - as in the example you gave - they have been trying to conceal a recent and chargeable event?

Exactly, the example from Jonic was of the law being correctly and fairly applied to someone who had knowingly broken it, a far cry from the scaremongering about UK yachts being impounded all over Northern Europe. Croatia I agree is a wholly different matter. I must remember to cross them off my cruising itinerary

 

[doug748]

The situation is not static and it would be complacent to judge the future on the past easy-going attitudes. It probably doesn't affect many UK yacht owners what happens in "a far away country between people of whom we know nothing" but if rumours of Croatia's increasingly aggressive demands for VAT-paid status from visiting EU-registered yachts since last year's EU accession are true it could spread to other countries with financial difficulties.

Without wishing to bore people, on this question without an answer, here is the text of a letter I have posted here before:

15th Aug 13

RYA
Ensign Way
Hamble
SO31 4YA

Dear Sir,

Earlier this summer, whilst on passage from UK to Brest, I was approached by French Customs Officers at L'Aberwrach.

After inspecting my passport and ship registration papers, I was asked for proof that VAT had been paid on the original purchase price. The boat is an unexceptional 1979 built sailing cruiser. My response was that I had little with me but that is was an old boat and normally considered exempt from close scrutiny. After a few words with his colleagues the matter was not pursued. However the parting words were, as near as I can remember them:

“You know, you should carry your VAT papers - we can ask to see them”

I must stress that the exchange was very positive and the comment came across as friendly advice. This time.

Two points:

This exchange confirms that, at the very least, VAT accountability on old boats is a topic of conversation at some official level in France.

It begs the question as to what would happen if the matter were pressed. I am sure that such evidence I have would not pass muster. Many owners will have nothing at all to show.

I am not a member but in view of published advice thought that you would wish to know of developments on the ground.


Yours

 

[GrahamM376]

Exactly, the example from Jonic was of the law being correctly and fairly applied to someone who had knowingly broken it, a far cry from the scaremongering about UK yachts being impounded all over Northern Europe. Croatia I agree is a wholly different matter. I must remember to cross them off my cruising itinerary

I don't think anyone is scaremongering. What must be considered is that the UK has a very lax attitude to leisure sailing with virtually no regulation so, in comparison with other EC countries we have few worries. Outside of UK waters, attitudes and regulation varies from country to country, some easy going, some pedantic about paperwork. From first hand experience I can tell you that dealing with foreign maritime police is not fun. Although the cases of serious hassle are few, it's prudent to be forewarned and carry as much documentation as can be mustered - just in case.

RYA advice is here http://www.rya.org.uk/infoadvice/boatingabroad/Pages/boatingabroadpaperwork.aspx

HMRC Reference:Notice 8 (April 2012) says - 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.

 

[Tranona]

There is a big difference between "collecting on behalf of fellow EU state" and just slapping a demand for 25% just because you can't produce "evidence". If it is on behalf of - and this has been the case for years - this assumes that the "fellow state" is also making a claim against the boat, but because the boat and/or owner is now in another state they can't pursue the case.

Not difficult to imagine, for example our friend Briatore moving his boat out of Italy to try and avoid the charges against him and the Italian authorities enlisting the help of the state where his boat has gone to pursue the claim.

This is just the kind of case where authorities want to stress that they have wide ranging powers, and why they use the language they do when giving advice. The reality is, however, for most people it is just a load of hot air as they have not committed any offence and the authorities have no reason to pursue them. This does not mean that individual officers might not "try it on" as doug748 reports but the reality is that they actually have no powers beyond asking. If there really was anything they could have done in his case they would have done it, but all they did was chant the meaningless mantra.

Annoying, and to be avoided if possible, but going back to the question that started this thread (and most similar threads) if the piece of paper does not exist, and there is no way of getting a certified copy (which in itself might not be acceptable) there is nothing you can do but live with the uncertainty. How you behave then depends on your assessment of the risks and your attitude to those risks. An individual decision.

 

[MinorSwing]

... I worried about lack of original VAT receipt years ago with a 1970s boat I wanted to take to France, but no-one has ever asked to see the VAT papers for that....

No need to worry. If a boat of that age was in the EU at the end of 1992 the VAT would be deemed to have been paid.

 

[JumbleDuck]

HMRC Reference:Notice 8 (April 2012) says - 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.

But is it not now the case that HMRC will not supply documents stating that a boat is deemed VAT-paid?

 

[Tranona]

But is it not now the case that HMRC will not supply documents stating that a boat is deemed VAT-paid?

Have not done so for many years - since they realised there is no way of being certain of the "status" of any boat as it is not a fixed thing. A boat can change its status by virtue of a specific transaction and become liable to VAT again on a subsequent transaction. So, even if you have all the crummy bits of paper there is no proof of payment - only evidence on that particular day of its status. The paperwork they issued was, anyway, not proof, simply an opinion that based on the paperwork evidence provided there was no liability outstanding.

Mealy mouthed words reflecting the fundamental inconsistencies inherent in trying to treat a transaction tax as an asset tax.

 

[BrianH]

There is a big difference between "collecting on behalf of fellow EU state" and just slapping a demand for 25% just because you can't produce "evidence". If it is on behalf of - and this has been the case for years - this assumes that the "fellow state" is also making a claim against the boat, but because the boat and/or owner is now in another state they can't pursue the case.

You claim that customs officials can have no empowerment procedures if they consider a visiting EU-registered yacht has no VAT-paid (or deemed VAT-paid) status. But to go to reductio ad absurdum, I am challenged and cannot comply so I am told to just carry on? Or, worst case, refused entry? What then is the point? It has no advantage to alienate visitors when no financial gain is achieved by doing so.

 

[davidfox]

Just to repeat my request, anyone got a Moody VaT receipt circa 1987 that I could look at can someone pm me?

 

[sailorman]

No need to worry. If a boat of that age was in the EU at the end of 1992 the VAT would be deemed to have been paid.

i have an affidavit sworn by my previous ( first ) owner stating the above

 

[Colvic Watson]

Curious, some on the thread saying this is potentially a real problem. But so far on this and the other VAT threads we've heard two actual stories, one from Jonic about a guy who tried to evade VAT on an imported yacht and one of a letter sent to the RYA, where the guy didn't have a VAT receipt and didn't have a problem, the French customs said OK but you should try to get one. We've never, ever, heard from anyone in these forums that they personally (not a mate from the club or a story at a VAT conference) has had a problem. If one was being a cynic, one would almost suspect that the myth helps brokers justify their services and organisers of VAT conferences their fees. But that would just be cynical

 

[Tranona]

You claim that customs officials can have no empowerment procedures if they consider a visiting EU-registered yacht has no VAT-paid (or deemed VAT-paid) status. But to go to reductio ad absurdum, I am challenged and cannot comply so I am told to just carry on? Or, worst case, refused entry? What then is the point? It has no advantage to alienate visitors when no financial gain is achieved by doing so.

Where there have been reports of boarding (such as doug748 above) and the skipper is unable to produce evidence the reaction seems to be something like "well you really need to have it" - unless there really is evidence that a liability exists. So, yes, as you say, carry on. Lack of evidence on its own is not enough - only an indicator. In the same way as explained on numerous occasions, possession of an original invoice is not definitive proof that no liability exists.

 

[Tranona]

i have an affidavit sworn by my previous ( first ) owner stating the above

Probably worthless! Read the RYA/HMRC advice on what is considered acceptable evidence.

 

[Tranona]

If one was being a cynic, one would almost suspect that the myth helps brokers justify their services and organisers of VAT conferences their fees. But that would just be cynical

Only partly - it is a very real issue for some people, particularly brokers like jonic who deal with big, expensive, relatively new, very mobile boats (and often clients). Many high value new boats are not sold to private individuals but to businesses such as charter operators or companies/owners who arrange their affairs to minimise their tax liabilities. Inevitably given the large sums involved there are mechanisms available to avoid VAT or reduce/reclaim/delay the payment.

Not only are these people a "target" for Customs to keep them within the law, but eventually their boats get sold to private owners who are not able to avoid paying VAT. Such buyers need to ensure that the boat they are buying does not have any outstanding VAT liability. Given the complexity of the tax and the way it is administered it can often be quite a challenge (as John will tell you) establishing the facts and ensuring the evidence is sufficiently robust to satisfy the authorities, the prospective buyer and probably the financial institutions funding the boat.

This, of course has little to do with the poor owner of a 1987 boat which does not have any evidence and in practical terms is completely irrelevant. It is rather like the Aids issue of the 1980s where the campaigners were trying to make it "everybody's" disease. It never was, and never was going to be (in the UK at least) everybody's disease. VAT and boats is an issue for a (numerically) small subset of boat owners for whom it is very real. For most of us it is a non issue.

The only reason why I am interested in the subject is because I was in that small subset when I bought my boat when it was a real issue for me, so I found out enough about the subject to ensure that I dealt with VAT correctly on my boat. Important for me as I bought the boat in Greece, but keep it in the UK and I did not pay VAT on the full value of the boat when I bought it. All perfectly legal, though, and I have a scruffy bit of paper to show the VAT payment!

 

[RichardS]

I'm in Croatia at the moment working on the boat and called into the marina office this morning to leave them a spare key having had a new one cut.

The manager asked if I had an original VAT receipt and could he take a copy of it as the authorities had been asking for documentation recently. I gave him the original and he took a copy and seemed happy.

Richard