Prof of VAT status

Re: Proof of VAT status

That's me done - how did I get sucked in??........... /forums/images/graemlins/mad.gif /forums/images/graemlins/grin.gif /forums/images/graemlins/grin.gif
 
jfm, the basis of your argument seems to be that it is not necessary for a buyer to have evidence of VAT paid on a boat because the buyer can never be liable for that VAT payment? So why do the RYA and every yacht broker in the land insist that proof of VAT status documentation is transferred from owner to owner? Are they all wrong and you are right? I quote from the RYA website

The VAT paid status of any vessel may have to be proved to the satisfaction of any Member State customs or tax authority that, for whatever reason wants or requires the tax position to be confirmed or clarified

Proof that VAT was paid must be retained to ensure that the VAT paid status of the vessel can, if necessary, be proved. This could be the original invoice/receipt or, in the case of an import, the import documentation showing payment of import VAT and any customs duty

It is the responsibility of the owner of the vessel to keep evidence of the vessel's VAT paid status so that it, if necessary, can be provided to any customs or tax authorities that asks to see it or to a person or business that purchases the vessel

I'd say that was pretty clear
 
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So why do the RYA and every yacht broker in the land insist that proof of VAT

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What does the RYA know anyway - or care - complete to??ers IMO - and I have experience of them as well. I'm only a member so that I can get my qualifications cheap.

On the other hand jfm DOES seem to know what he is talking about.
 
The quotes I gave came from the RYA website members only FAQ's which were prepared in conjunction with HMRC. If ever you're asked by customs officials to produce VAT status docs for your boat, I hope jfm is there to argue your case /forums/images/graemlins/smile.gif
 
well, I dont think they are arguing a case of law, which Jfm is..
They are saying that you may (not you WILL) be required to "prove" the VAT status of your boat when abroad... But come on, this original VAT document doesnt prove anything, as far as I can see. I can just type one out on my home PC and wave it in the face of some foreign customs guy, saying here you are matey.. "proof" VAT has been paid. He hasnt any idea what the invoice from Megaboat Broker should look like. Surely what the customs guy wants is enough documentation to give him adequate reason to think the boat's VAT status is "paid". Or perhaps, more likely, make him suspicious that VAT hasnt been paid, when it should have been. Still, according to HMRC website, thats not his business if the boat is registered in the UK
It seems to me the RYA are trying to give a suggestion as to what you should own as best practice, not law.
In a similar vein, I think our own tax office is answering a specific question... what documents would they consider acceptable? Well, original documents, in the sense of not a photocopy, is fairly standard for any documentation, not just this case. But then maybe they are being asked the wrong question.
I think we are back to convenience, again.
 
gjgm, I can't argue with that as yes, a fabricated VAT invoice would probably be enough to satisfy most foreign customs officers but I don't think I'd want to be showing a fabricated invoice to a UK customs officer as it's too easy for him to check it and the consequences could be dire
Yes, the RYA may well be stating what is best or most common practice rather than law but since, in my general tax and VAT experience, HMRC choose to interpret the law in a manner that best suits their position, I would'nt want to be arguing a point of law with them on this issue, especially as it's easily avoidable with the correct documentation
As for the issue as to whether UK VAT is the business of the UK HMRC, I can only quote from the RYA website which suggests that this is categorically not the case
The VAT paid status of any vessel may have to be proved to the satisfaction of any Member State customs or tax authority that, for whatever reason wants or requires the tax position to be confirmed or clarified
 
Deleted User, I have said what I'm arguing above, ref A-B-C. I am massively more qualified and on this subject that every employee of the RYA and every yachtbroker in the UK put together and if they disagree with me on C's liability to pay A's VAT and HMRC's lien on C's boat, then yes they are all wrong :-). You can believe who you want to. No big player goes to the friggin RYA, a yachtbroker, or (least of all) HMRC for advice on tax law, however :-)
 
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When asked by the VAT man (in the UK or abroad) it will be YOUR responsibility to prove that the VAT was paid.....and in default of which YOU get a bill for the VAT.

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David that is often stated (especially on these forums) but it's not correct. I challenge anyone to find a law saying that if A sells a boat to B, and A/B didn't correctly account for VAT on that transaction, then later B sells to C in good faith, C is liable for the VAT on the A-B transaction.

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Ok, I will concede the point on the basis that you seem to know yer VAT stuff /forums/images/graemlins/grin.gif.....I will therefore rephrase "responsibility" into "YOU (and not the Seller) could be the fella sitting on yer boat trying to explain to a foreign Custom's officer why they should not slap a VAT bill against the boat - and seal her until paid OR the lawyers sort it out at your expense".

IMO anyone who buys a boat which they beleive VAT has been paid on (and pays the £££ accordingly) without getting evidence is a bit of a donut (no offense meant to OP /forums/images/graemlins/tongue.gif)........both to cover yerself on the potential downsides with Foreign Customs, but also for re-sale (£££) purposes.

Still, it is not my money /forums/images/graemlins/grin.gif

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David that's exactly the point. Agreed completely. The benefit of having VAT papers is to fend off enquiries from foreign customs officials. VAT papers are needed to avoid a UK boater with a UK boat being liable for VAT on a prior sale of the boat. The reason I'm saying all this is that if anyone here is ever questioned by a customs official it is good to know exactly what it is you're arguing about. In general, the only thing a customs official can properly question you about is not "Prove to me that A paid the VAT, otherwise you are liable for it Mr C!". It is "Did you import this boat from outside the EU Mr C, and not pay the VAT?" As i said above, your Ramsgate fuel receipt might in fact deflect his question perfectly well. Surely it's good that folks understand this? Much easier to win a fight when you understnad what it is you're fighting about, surely?
 
Massively qualified enough not to remember the VAT arrangements between 2 EU VAT registered companies /forums/images/graemlins/smile.gif /forums/images/graemlins/smile.gif /forums/images/graemlins/smile.gif
I bow to your greater knowledge but will continue to carry my VAT docs on my boat
 
Mike
Jfm also said I was utterly incorrect about VAT being only the Uk HMRC issue, and I did refer him to the site, though he didnt then comment further. Perhaps it would have been more accurate of me to have chosen their word "indicate"

This is from HMRC:
If you are unable to provide any of the above, whilst cruising within the EU you should carry a Bill of Sale (between two private individuals in the UK). Whilst this is not conclusive proof that VAT has been paid, it does indicate that tax status is the responsibility of UK Customs.
The next paragraph is interesting:
When buying a used pleasure craft from any commercial organisation in the EU, you should ensure that the invoice shows separately any VAT, which that organisation becomes liable to pay to its VAT collection authority as a result of selling the pleasure craft to you. If the invoice does not show VAT separately you may have difficulty in substantiating a claim that no further VAT is due. If you are buying from a business or an individual in the EU with no liability to account for VAT, you should obtain evidence that VAT, if it had ever been due in the EU, has been accounted for.
 
Yup, I make loads of mistakes when quickly engaging keyboard before brain, looking on here in between other things, and then admit them immediately afterwards :-) It was, as you know, a peripheral issue.

I'm not saying dont carry your VAT docs nor that VAT docs don't come in handy. I'm just explaining the background to help folks understnad where customs are coming from, in case they are boarded on their boats. I mean, my "Ramsgate fuel bill" thing above, for example. I reckon that's useful stuff to know, and that it's useful to know that whatever customs might be ranting on about when they board your boat they cannot ever lawfully be chasing Mr C for Mr A's VAT. You seem not to see that, or else you seem not to acknowledge the usefulness of that info, and prefer to make a small-minded post. Ho hum Deleted User.
 
The UK HMRC and UK registered boat issue is an interesting question because, in essence, VAT is a tax which is levied only on exchange (transaction) so, if you can demonstrate that the last transaction on the boat took place in the UK, then that, in theory, that proves that the VAT should have been paid in the UK. In practice, of course, you are faced with a foreign customs official demanding to know whether your boat is VAT paid and he may not accept the UK transaction argument

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If the invoice does not show VAT separately you may have difficulty in substantiating a claim that no further VAT is due

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Well, that contradicts what jfm has been saying and supports what I've been saying in that the current owner of the boat may still have a VAT liability
 
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If the invoice does not show VAT separately you may have difficulty in substantiating a claim that no further VAT is due

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Well, that contradicts what jfm has been saying and supports what I've been saying in that the current owner of the boat may still have a VAT liability

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Yes it does support what you have been saying. It is still quite wrong. HMRC don't of course say WHY a UK citizen might be required to "substantiat[e] a claim that no further VAT is due" on a purchase of goods in an overseas country. That's becuase they can't. There is no reason why a UK citizen buying a boat in good faith from an EU seller should ever to be required to substantiate that.

mike, we're not going to agree becuase you assume that if HMRC write something it must be right. Then you quote them and say "look see, HMRC agree with me so I'm right". I never start from the proposition that HMRC are right and I know they're often worng. Do you think the best tax lawyers work for HMRC or privately? (No need to answer, it's a rhetorical question /forums/images/graemlins/grin.gif)
 
hmm
problem here might be that I cant afford to employ you to argue the case /forums/images/graemlins/wink.gif. Most of us would have to go along with HMRC, whether they are right or wrong, so, even if they are wrong, they end up being right for most of us!
 
Gigm I'm sorry I didn't reply. Reason is, I didn't follow your line of thinking. You said VAT is the responsibility of the country in which the boat is flagged. I said it wasn't. You then quoted a paragraph from HMRC website in support of your argument and gave mne a link, but that HMRC material actually had nothing to do with your statement that the flagging country is reposnsible for VAT. So I kinda left it there.
 
jfm, apologies if you thought my dig was small minded. It was'nt meant to be anything other than faintly amusing
Yup, I know the value of good tax accountants. They've saved me a lot of money over the years, bless them
 
this:
This is from HMRC:
If you are unable to provide any of the above, whilst cruising within the EU you should carry a Bill of Sale (between two private individuals in the UK). Whilst this is not conclusive proof that VAT has been paid, it does indicate that tax status is the responsibility of UK Customs.
Ok, I see your point.. they refer to the purchase of the vessel,, not the registration.
So small change in my argument ! If you can show that the purchase was in the UK, do you agree with HMRC that the VAt is their responsibility.
or is this another part of HMRC statements that is wrong /forums/images/graemlins/wink.gif
 
It wasn't the dig at my mistake. I'm bang to rights on that and I make mistkaes all the time :-). The "small-minded" referred to "Well I'll jolly well carry my VAT papers anyway" bit, without any recognition that I never said dont carry them, and some of what i have gone to the trouble of setting out to OP and other contributors might at least be useful. It's useful imho to hear that C never has to pay A's tax regardless of C's paperwork, and if stopped in the Calais scenario it's useful to know the Ramsgate proof might save the day. Oh, and I'm not a blooody tax accountant :-) No probs, it's only a forum /forums/images/graemlins/grin.gif
 
OK, you said "registration" which has a specific meaning in boats. That was what I diagreed with.

As for HMRC's "If you are unable to provide any of the above, whilst cruising within the EU you should carry a Bill of Sale (between two private individuals in the UK). Whilst this is not conclusive proof that VAT has been paid, it does indicate that tax status is the responsibility of UK Customs.", I generally agree with it. It's not the best statement in the world. For example, why does it matter if the BoS is between two indviduals? If the seller were a company that would be just as good. And it fails completely to recognise that even if the boat were bought in the foreign country the BUYER isn't responsible for the VAT on the sale of it, so in that sense the statement is a bit craap, but it's kinda barking up the right tree, I suppose. No matter - we've done this to death imho.
 
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