Original VAT Receipt

[jonic]

I can assure you kipper we absolutely hate it and it makes our job incredibly difficult!

(Typical cynical and misinformed view of the forum :encouragement:...sigh.)

We actually waste hours and hours of unpaid time because of it and campaign relentlessly to get it changed - for you lot!

It is major obstacle to selling boats, not something that helps us in anyway.

But what you will find is that I and many colleagues have repaired or put right a lot of problems, often for people on here.

Hopefully they will be along in a minute to verify.

To recap.

They say you must have VAT paid proof if using a boat in the EU.

From Customs notice 8

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.


UK customs generally operate a light touch and aren't going to check every boat for VAT papers willy nilly.

However I can categorically tell you that I do know of occasions when they have checked boats in the Solent that were moored up and had not been foreign.

I do know of boats that had no papers that have been fined in Portugal, moved on in Holland and investigated in Spain.

I also know of a boat with VAT papers that had them dismissed as not being correct and VAT charged on re-entry to the EU in the Azores (this is a boat that had not changed hands overseas).

I also know of several UK boats that major marine lenders have turned down for a mortgage because they didn't like the VAT status papers.

I have had had many hours on the phone with UK customs and they cannot give a definitive answer because other member states will behave differently so you will find no-one who will say it will be OK.

And there have been postings from people on here that have had trouble.

It's not a huge problem but it is a grey area and risk however small is there.

As brokers we would dearly love it for Brussels to come up with a solution, but there does not appear to be one coming any time soon.

I have to turn good business away because of it :disgust:

 

[JumbleDuck]

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

That's nice, but if she spend a couple of consecutive seasons in Oslo after that, you could be on the hook again. It's a daft situation, arising from the potential need to pay VAT more than once on the same boat.

 

[Colvic Watson]

I appreciate the detailed reply Jonic. Can I just point out, that again it's the language of "I know about" or "I heard about" we've never ever had an actual owner in a magazine or on this forum say something like "I lost my VAT papers, I've never been out of the UK but I still got fined the VAT". I get that the myths and rumours have an effect, mortgages are turned down, you spend many hours pre-sale getting the VAT ducks in a row. Though to be fair, you are dealing in a strand of boat that is likely to have a very dubious VAT status - blue water boats are meant to leave the EU for long periods!
The countless thousands of UK to EU trips by yachts over the last two decades and not one single reported case of a VAT charge on a boat that shouldn't be liable? But a few dozen cases doing the rounds where someone got grilled by an over enthusiastic official who didn't like the paperwork. Mix that in with the ridiculous legal ambiguity of VAT, the absence of receipts for most 20 year old+ boats and a thriving rumour machine - it's a no wonder it produces an effect. Just no actual cases - yet. Croatia is a different ball game and I suspect yachts are just the tip of the iceberg of an attempt to use the EU system to extract dosh from foreigners - not the first country to do it.

 

[myquest]

That's nice, but if she spend a couple of consecutive seasons in Oslo after that, you could be on the hook again. It's a daft situation, arising from the potential need to pay VAT more than once on the same boat.

You won't have to go as far as Oslo if Scotland votes yes! Having read through this I think if I had a boat based north of the Border I would be heading south pronto-ish to make sure I was in EU waters. Just in case, mind!

 

[BrianH]

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?

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.

Tranona, I have the utmost respect for your knowledge and sensible comments in this field but clearly you have never tried to declare into Croatia with a set of documentation that deviates, even slightly, from the requirements. I can assure you from experience, it will spoil your day - and possibly your cruising plans - and may well cause you to adapt your - what some may call confrontational - opinion.

I am amused at the insularity exhibited by so many who keep insisting on evidence of past occurances. Of course there are none, or very few. But the world is changing, especially in the southern EU states where fiscal circumstances may well provoke exactly the same attitude that Croatia appears to be adopting.

 

[Tranona]

Tranona, I have the utmost respect for your knowledge and sensible comments in this field but clearly you have never tried to declare into Croatia with a set of documentation that deviates, even slightly, from the requirements. I can assure you from experience, it will spoil your day - and possibly your cruising plans - and may well cause you to adapt your - what some may call confrontational - opinion.

I am amused at the insularity exhibited by so many who keep insisting on evidence of past occurances. Of course there are none, or very few. But the world is changing, especially in the southern EU states where fiscal circumstances may well provoke exactly the same attitude that Croatia appears to be adopting.

Well aware of the Croatia difficulties - both you and others have reported them at length. However you will find similar comments about many other South European countries, but despite that boats move in and out, charter companies operate, N Europeans go there on their holidays etc etc. Hopefully in joining the EU club Croatia may start to behave like the other states - but guess old habits die hard. At the moment one cannot predict how they might act if you are unable to comply and if it becomes a big issue then there may need to be a resolution through the courts as is happening now in respect to the use of red diesel in UK based boats and happened in the past with cruising permits in Greece. This of course is way outside what any individual can do.

Individuals need to make their own decisions about whether they visit a country or not, depending on how they perceive the risks. Plenty of examples of individuals taking actions when a state imposes negative conditions on keeping or using boats in their waters - flight of certain types of boats from Spain and the potential exodus of boats from Greece when the new taxes come in are examples.

 

[Colvic Watson]

I am amused at the insularity exhibited by so many who keep insisting on evidence of past occurances. Of course there are none, or very few. But the world is changing, especially in the southern EU states where fiscal circumstances may well provoke exactly the same attitude that Croatia appears to be adopting.

It's a funny old world where asking for examples is considered a bad thing and the inability to provide any is seen as proof that a problem exists

Still, Croatia is a different issue though I'm sure the beauty of the coastline and the unspoilt local towns are a big compensation, it does look rather nice. Maybe for the time being best visited in a charter yacht? That way if it's impounded it's someone else's problem.

 

[BrianH]

It's a funny old world where asking for examples is considered a bad thing and the inability to provide any is seen as proof that a problem exists

Apologies if it came over as "a bad thing" and there was no intention to use the lack of examples as proof of a problem - I am not so illogical.

Rather I was trying to point out that it would be a mistake to extrapolate the past to what may occur in the future. A number of EU states are now beginning to check for VAT status on yachts, such has been the complex avoidance - even evasion - mechanisms to date. Plus the need to increase tax revenue in many of them.

 

[Colvic Watson]

Apologies if it came over as "a bad thing" and there was no intention to use the lack of examples as proof of a problem - I am not so illogical.

Rather I was trying to point out that it would be a mistake to extrapolate the past to what may occur in the future. A number of EU states are now beginning to check for VAT status on yachts, such has been the complex avoidance - even evasion - mechanisms to date. Plus the need to increase tax revenue in many of them.

No offence taken. Regarding the second part, apart from your own experience in Croatia, do you have any first hand experience of this increase in VAT checking? It's just that this myth has propagated through 'friends of a mate who read it on a forum'. We're constantly told its a big problem but never hear from anyone who's had to pay a penny they didn't owe. Saying that it's going to get bad is an interesting hypothesis, but extrapolated from Croatia isn't based in very much fact that's relevant to those of us outside of that very small part of Europe.

As for the Scots, clearly voting YES has an extra benefit, leaving the EU means you can safely cruise without having a thirty year old VAT receipt.

 

[Tranona]

As for the Scots, clearly voting YES has an extra benefit, leaving the EU means you can safely cruise without having a thirty year old VAT receipt.

No. Everybody loses out. Scots boat owners will have to apply for temporary importation if they want to visit English, Welsh or Irish waters (with all the restrictions this implies). Anybody from the EU who takes their boat to Scotland potentially loses its VAT paid status. If only the beloved Alex was a boat owner, the independence campaign would never have got off the ground.

 

[BrianH]

No offence taken. Regarding the second part, apart from your own experience in Croatia, do you have any first hand experience of this increase in VAT checking?

No. I spend the summer cruising the northern Adriatic and that means mostly Croatia, Slovenia and my own NE Italy. But I deliberately avoided Croatia last year because of its accession and my questionable VAT status. However, I did quiz a few from my marina who did cross the Adriatic and they told me they had not been asked about their VAT status. However, a forumite who keeps his yacht there reported of checks in the Split area.

My present concern stems from a newsletter from a normally very informed and respected source who is constantly monitoring the situation and has contacts with many insiders in the marine industry. I quoted a very small snippet in post #19 above and would not wish to reveal any more of the many pages that are basically from a subscription service.

I have every intention of returning to Croatia again this year so I hope the "carry on" principle is well established by the customs officials by the time I declare in. Watch this space.

Saying that it's going to get bad is an interesting hypothesis, but extrapolated from Croatia isn't based in very much fact that's relevant to those of us outside of that very small part of Europe.

I cannot cite any source but I have read somewhere on-line that France, Belgium and Holland have plans to check yacht VAT status. I suspect they will eventually give up as too many UK yachts visit there and they will be flooded with many in my twilight category. Another red diesel situation?

 

[Colvic Watson]

I cannot cite any source but I have read somewhere on-line that France, Belgium and Holland have plans to check yacht VAT status. I suspect they will eventually give up as too many UK yachts visit there and they will be flooded with many in my twilight category. Another red diesel situation?

Maybe it was a thread on here? Or in this very thread

It's interesting how fast the Belgies have backtracked from the red diesel thing, two years ago it was non-negotiable and the Brits were all wrong. So we all stayed away and now suddenly it's come on over Brits and spend your sponduliks in our marinas. Red diesel in your tank? No problem.

 

[Tranona]

I cannot cite any source but I have read somewhere on-line that France, Belgium and Holland have plans to check yacht VAT status. I suspect they will eventually give up as too many UK yachts visit there and they will be flooded with many in my twilight category. Another red diesel situation?

France and Holland in particular have created their own problems by promoting schemes to reduce VAT payments on high value boats - inevitable given the importance of those industries to their economies. No doubt they will have measures in place to ensure that those schemes are used correctly.

"Old" UK boats have been visiting those nearby countries for years, and apart from a few flurries of interest in the early days (post 1992) there have been no reports of any issues. Indeed the RYA carried out a major research project a few years ago and found little evidence that other states were asking for VAT evidence from visitors.

 

[n4585k]

When it comes to VAT and customs, it might prove interesting to paint a wider picture. I have some serious experiences with customs and VAT, not concerning boats but a small aircraft and a violin. The violin is an old Italian instrument, built in 1746. I bought the instrument in Switzerland from a very reputable violin broker. My wife (who is a violinist) flew to Geneva to pick the violin up, and flew back to Germany where we were living at that time. When she re-entered the EU (through the green 'nothing to declare' lane) she was taken out for questioning. Since she couldn't provide a VAT declaration she was charged for trying to import goods from outside the EU, and was jailed at the Munich airport (she was released 2 hours later). We had two lawyers, one to avoid criminal charges, and one to get the low-VAT rating that applies to art objects (as opposed to the regular VAT rate). Needless to say the whole ordeal was nasty, and costly. Through colleagues in the music industry I hear that customs are going harder after VAT issues in the past two years. Which has also been the case with the aircraft: more frequent checks by customs agents.

It might be a question of time before boats are made a next target. In any case, as some of you know I am in the process of buying a boat. There is no way I would buy anything that doesn't have a very clear VAT status, and the paperwork to prove it.

 

[JumbleDuck]

It might be a question of time before boats are made a next target. In any case, as some of you know I am in the process of buying a boat. There is no way I would buy anything that doesn't have a very clear VAT status, and the paperwork to prove it.

What proof would you want that the boat had not been outside the EU for any two year period since VAT was last paid on it? Serious question.

 

[Tranona]

When it comes to VAT and customs, it might prove interesting to paint a wider picture. I have some serious experiences with customs and VAT, not concerning boats but a small aircraft and a violin. The violin is an old Italian instrument, built in 1746. I bought the instrument in Switzerland from a very reputable violin broker. My wife (who is a violinist) flew to Geneva to pick the violin up, and flew back to Germany where we were living at that time. When she re-entered the EU (through the green 'nothing to declare' lane) she was taken out for questioning. Since she couldn't provide a VAT declaration she was charged for trying to import goods from outside the EU, and was jailed at the Munich airport (she was released 2 hours later). We had two lawyers, one to avoid criminal charges, and one to get the low-VAT rating that applies to art objects (as opposed to the regular VAT rate). Needless to say the whole ordeal was nasty, and costly. Through colleagues in the music industry I hear that customs are going harder after VAT issues in the past two years. Which has also been the case with the aircraft: more frequent checks by customs agents.

It might be a question of time before boats are made a next target. In any case, as some of you know I am in the process of buying a boat. There is no way I would buy anything that doesn't have a very clear VAT status, and the paperwork to prove it.

But your wife was breaking the law and trying to smuggle the violin without paying tax.

This is very different from most of the discussion which is about the need for evidence when it is clear that offence has been committed and there is no taxable event.

You are, however right to try and ensure there are no liabilities outstanding for VAT, but this only applies to boats that do not have a straightforward, private owner, always in the EU history. The warning signs are easy to spot - corporate ownership, purchase under lease schemes, spent time outside the EU. The challenge then is following the transactions to identify when the tax liability occurred and evidence that it was settled correctly.

 

[KellysEye]

When I sold our yacht through a broker they wanted a VAT receipt. I can see why the buyer wants to see, to prove it has been paid. If Moodys didn't give you a VAT certificate then ask for it now.

 

[JumbleDuck]

But your wife was breaking the law and trying to smuggle the violin without paying tax.

Indeed. I think most customs authorities would get tetchy in the circumstances, as HMRC did in Jonic's tale.

 

[jwilson]

Going back to the original post, if you have a copy of the original bill of sale from Moodys, it should show price and VAT separately, then a total sum. If it does, that is your evidence of VAT paid. There is not normally a separate VAT receipt if buying a yacht from a boatbuilder.

No going back to Moodys now - though Moody yachts are still being sold the company is entirely different and will not be able to help you. I am PMing you with another suggestion, if your Moody paperwork does not show a VAT amount.

 

[Tranona]

If Moodys didn't give you a VAT certificate then ask for it now.

There is nobody to ask. The original supplier only has to keep records for 6 years. In addition, in this case (as so often happens) the company no longer exists. It is not a "certificate" anyway, but the original VAT invoice which is required.

There has never been any legal obligation to keep invoices and before 1992 never any suggestion that it would ever be needed. The advice - and it is only that - that VAT evidence is required when visiting other states is only post 1992, so not surprising that many older boats do not have this piece of paper.