Original VAT Receipt

[Tranona]

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.

But a Bill of Sale does not need to show the purchase price (only a consideration), nor does it need to show the VAT. The VAT evidence is the commercial invoice which is necessary for accounting for VAT by the supplier.

 

[n4585k]

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.

My wife did break the law, however she didn't intend to as she was unaware (thankfully the judge agreed). The only reason I shared this story is because I believe customs are increasing their VAT status checks. You knowing that you didn't do anything wrong is one thing, proving it however is a different story. Better come prepared.

 

[Tranona]

My wife did break the law, however she didn't intend to as she was unaware (thankfully the judge agreed). The only reason I shared this story is because I believe customs are increasing their VAT status checks. You knowing that you didn't do anything wrong is one thing, proving it however is a different story. Better come prepared.

The point I was trying to make is that smuggling and what you term "status checks" are two different things. If you tried to import a boat illegally you run the risk of exactly the same thing as happened to your wife - and customs are very hot on it. However if your wife had bought the violin privately in Germany, nobody is likely to be asking about VAT as that is not a chargeable event. Moving it from Switzerland to Germany triggers off a chargeable event - even if it was bought from a private person.

It is exactly the same with boats - it is the nature of the transaction that determines whether VAT is payable and transactions between private individuals within the EU are not chargeable events.

 

[n4585k]

The point I was trying to make is that smuggling and what you term "status checks" are two different things. If you tried to import a boat illegally you run the risk of exactly the same thing as happened to your wife - and customs are very hot on it. However if your wife had bought the violin privately in Germany, nobody is likely to be asking about VAT as that is not a chargeable event. Moving it from Switzerland to Germany triggers off a chargeable event - even if it was bought from a private person.

It is exactly the same with boats - it is the nature of the transaction that determines whether VAT is payable and transactions between private individuals within the EU are not chargeable events.

But how do customs recognise where a violin or boat has been bought (and under what kind of VAT scheme) without checking?

 

[doris]

Have been fascinated by this thread.
Sufficiently so that I have just dug out a VAT receipt for my boat, scanned it and printed it.
Looking at the two versions I cannot tell which is the original and which is the copy. With the naked eye, they are identical.
If one has lost the original but can get a proper looking VAT number, then to print one off is the work of moments. No-one can ever prove you wrong. HMRC will have no records, the issuing company doesn't exist, your proof cannot be disproved. Lost in all the detritus of boat ownership it soon becomes just another piece of paper.

 

[jwilson]

But a Bill of Sale does not need to show the purchase price (only a consideration), nor does it need to show the VAT. The VAT evidence is the commercial invoice which is necessary for accounting for VAT by the supplier.

It would be most unusual for Moodys to have issued a bill of sale for a new yacht without showing an accounting of the price and VAT- maybe I should have used the words invoice or receipted invoice to distinguish it from a subsequent MCA-type bill of sale that quite often just has "one pound and other considerations".

 

[Heckler]

Have been fascinated by this thread.
Sufficiently so that I have just dug out a VAT receipt for my boat, scanned it and printed it.
Looking at the two versions I cannot tell which is the original and which is the copy. With the naked eye, they are identical.
If one has lost the original but can get a proper looking VAT number, then to print one off is the work of moments. No-one can ever prove you wrong. HMRC will have no records, the issuing company doesn't exist, your proof cannot be disproved. Lost in all the detritus of boat ownership it soon becomes just another piece of paper.

Exactly! we have other posters here describing their receipt, little bits of paper! So if one was to get Quickbooks or Sage or whatever, set it up with the name and address of the original supplier, even get someone to scan their original invoice and pm it. All the data needed, original vat number etc. Then print off as many copies as they wanted! FFS there is no std vat rcpt in the uk, so the offcious tw at in Croatia looks at your piece of paper and does what?
Stu

 

[Tranona]

But how do customs recognise where a violin or boat has been bought (and under what kind of VAT scheme) without checking?

Usual way. Look at the receipt, or in the case of a boat, the Bill of Sale. It is the last transaction that is of interest. If the BoS was between two private citizens in the EU then there is no VAT liability. If the sale took place outside the EU then VAT is payable on port of first entry into the EU. The only common situation where private citizens are liable to pay VAT to customs is if they (like your wife) import goods from outside the EU.

There are, however many ways VAT offences can be committed by VAT registered entities that might involve boats, and many individuals may also be VAT registered and own boats, and it is these kinds of situations where customs concentrate their efforts.

 

[Tranona]

It would be most unusual for Moodys to have issued a bill of sale for a new yacht without showing an accounting of the price and VAT- maybe I should have used the words invoice or receipted invoice to distinguish it from a subsequent MCA-type bill of sale that quite often just has "one pound and other considerations".

According to the OP in his very first post he has the Bill of Sale from Moodys and there is no mention of VAT.......

If there had been there would not have been an issue, nor getting on for 90 posts.

 

[jwilson]

According to the OP in his very first post he has the Bill of Sale from Moodys and there is no mention of VAT.......

If there had been there would not have been an issue, nor getting on for 90 posts.

A typical document from the old incarnation of Moodys would be http://www.yachtsnet.co.uk/P1020495.jpg plus several other similar ones relating to previous stage payments. There would also be a hull construction certificate with a red seal. Not infrequently these are invoices only, and there is no actual receipt for payment - customs officials usually twig that the buyer would not have been able to take away the boat if he had not paid the bills.

HMRC state that an "original invoice or receipt" is "supporting evidence" for VAT having been paid - note the careful wording - ie it is not proof. It is possible (though extremely unusual) to have a yacht with an apparently perfect chain of original receipted VAT invoices, bills of sale for every subsequent sale between private EU based individuals, yet for the boat to have lost it's VAT paid status through an undocumented event or events.

The RYA made attempts in 2006 and 2007 to gather evidence that genuinely-VAT-paid-but-lost-documents yachts were being charged VAT, and failed. As far as I know, and I have spoken with some of the people involved at the RYA, all the cases that came up were ones where VAT was genuinely payable through chargeable events such as importation into EU having taken place without the correct VAT being paid, or other "tax evasion" scenarios.

As yacht brokers we know what "red flags" to look for when going over documentation of boats for sale to see if the VAT evidence is credible. We also know that in some cases adequate evidence can be gathered retrospectively, and spend quite some time and effort doing so. There are though a large number of boats around that are 99.999% certain to be genuinely VAT paid, but that this is simply unprovable. On a smaller lower value boat that is unlikely to go beyond the EU that is usually not a problem. On a high value or 'bluewater' boat it is can be a problem.

 

[Tranona]

Agree with every thing you say. However, the OP says he does not have the invoices, only a "Bill of Sale" but without seeing it, difficult to know what it actually says.

The losers in all this are owners/sellers/potential buyers who hear of draconian things that might happen if they don't have the bit of paper and are either unable to sell or buy the boat. Even if the fear is not that they will have to pay anything, as you see from several posts here it is the fear of hassle from customs in other states - even though the evidence of hassle is slim.