Proof of VAT paid

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miket

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Sorry, don't seem able to use the search facility properly and I know this has been done to death.
In process of buying Broom 38 (yr 2000).
Primary use will be in EU (France and Holland) for 2 years and then back to UK.
I know the only totally acceptable piece of paper to show authorities is the Original Invoice from builder/ agent to 1st owner.
Does anyone have "1st hand" experience of any other acceptable document.
At one time HMRC would provide a document that was acceptable EU wide.
 
Is the seller a private person or selling in the course of a business?

How many previous owners? Who was the first owner?

Has the boat been kept in the UK since new?

What documentation of previous sales is available? What's missing?
 
If you think it is VAT paid ask Broom's for an authenticated copy of the original, on original headed paper, signed by a director of Broom saying that it is an authentic copy. I was stopped and boarded by Dutch Customs and Immigration three weeks ago off, er... Holland and they were happy with the authenticated copy that I had. I did also have part 1 mcga, ships and operators radio licence, ICC, and passports though, but I'm sure you'll have those also?
 
miket said:
1. Broker
2. 1st owner (dead) + current.
3. Yes.
4. No original invoice from Broom/ agent on 1st sale.
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Mike,

The answer to question 1 is ambiguous. You may be buying 'through' a broker (who is obviously acting in a business capacity) but are you buying from a business or a private individual.

Same question about the first owner.

If the answer is that both are/were selling as private individuals, then it's it is almost certain that nothing is amiss with the VAT aspect. However, for certain peace of mind, try Targalout's suggestion of getting in touch with Broom (or the dealer who sold to the first owner). If that doesn't work, then the fact that you are purchasing from a private individual (not acting in the course of a business) means that there is no VAT to be accounted for by the seller on your sale. Similarly on the sale by the first owner to the second owner. Even if there was, you could not be held liable, as purchaser. This is a matter of law.

That possibly leaves you with the practical problem of what to do if cruising abroad and asked to provide "VAT paid proof".

If the boat is right for you, you may be willing to accept a degree of theoretical risk. The sort of practical evidence, that indicates that VAT was paid when the boat was first supplied, that would help to reduce the risk would be the chain of title documentation (bills of sale, copies of sale contracts etc) that prove (so far as possible), or indicate, that the buyers and sellers (other than the first seller) were all acting in private capacity.
 
Just to add to Observer's comments, which are correct, it is highly unlikely that any "foreign" official will specifically ask for evidence of VAT unless they suspect that an offence has been committed. However, once they see that it is a UK registered vessel they will not be interested as any VAT issues are the concern of the UK HMRC.

It does, however, make sense to try and get a copy and you are lucky as the builder (and probably the dealer) are still in business. They will probably charge you a fee but it is worth it even if you never need it as it will save you a bit of hassle when you come to sell.

BTW the HMRC "document" only covered a small number of boats - and would not include yours. They discontinued it years ago because it did not do what it said it did, it was difficult to get all the evidence together, but most importantly the need to have it became redundant for the reasons covered already.
 
Tranona said:
once they see that it is a UK registered vessel they will not be interested as any VAT issues are the concern of the UK HMRC
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I agree with the rest but that quote isn't right. One could easily take delivery of a boat VAT free in CI, UK flag it, then illegally smuggle it to NL. The NL guys know that, and if they suspected smuggling they wouldn't be put off by the mere UK flagging of the boat. More generally, a huge number of UK flagged boats (mine included) are delivered to France/Spain/etc when new, and the country that needs to be happy about VAT status is the delivery country, and they know that, and wont assume that UK flagging per se means they have no VAT claim
 
Re-reading your first post, I see you have definite intention to keep the boat outside the UK for a year or two. Although that shouldn't actually change anything, I have to admit I would be more inclined to require the "VAT paid" proof because of the greater probability of having to explain to a non-UK tax authority.

If I knew (and could produce reasonably solid evidence) that the boat was first supplied by a VAT registered entity (Broom or a Broom dealer) to the first owner and that the boat had always been in the UK, I would be inclined to believe I would win any argument with HMRC that whether VAT had been paid or not is not my problem (subject to the following, that is the legal situation AIUI).

Clearly dealing in another language with a Dutch or French tax authority would be another and more uncertain matter.

The important question in the "VAT paid" issue (although some people, including HMRC and others, may say something else) is this:

- if any goods (including a boat) have ended up in the ownership of a person who is resident in the EU and is keeping the goods in the EU then there must have been at least one "taxable supply" (i.e. a sale by a person registered for VAT) at some point in the history of ownership OR the goods must have been imported into an EU country and VAT paid at the time of entry. Whether the taxable supply was to a VAT registered business (and VAT recovered as input tax) or to a private, unregistered individual is irrelevant.

In the facts of your case, if the boat was sold by Broom or a Broom dealer (in a bona fide transaction) that taxable supply MUST ** have occurred. Thereafter, it matters not what happened in subsequent sales - you as the latest owner have what is colloquially (but inaccurately) a "VAT paid" boat.

** The only possible way I can see in which there was not a taxable supply would be if the first sale had been made without VAT because it was "new means of transport" for removal to another member state but it was NOT, in fact removed and the first buyer did not subsequently pay VAT in the UK. That is conceivable but highly unlikely. In that case, the first buyer would have run the risk of forfeiture, but I don't know whether that risk passes to subsequent bona fide purchaser(s). Even if you can't actually get a copy of the VAT invoice, it may be possible for the first seller (Broom or Broom dealer) to confirm (in writing) that the first sale was a taxable supply in the UK. That is de facto "VAT paid" proof, in the correct sense.

PS - I see jfm's online now. I think my analysis is correct and he will no doubt put me right if not.
 
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jfm said:
I agree with the rest but that quote isn't right. One could easily take delivery of a boat VAT free in CI, UK flag it, then illegally smuggle it to NL. The NL guys know that, and if they suspected smuggling they wouldn't be put off by the mere UK flagging of the boat. More generally, a huge number of UK flagged boats (mine included) are delivered to France/Spain/etc when new, and the country that needs to be happy about VAT status is the delivery country, and they know that, and wont assume that UK flagging per se means they have no VAT claim
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Of course you are right in principle, but that is not the case here. The boat seems to have been supplied by a UK dealer (although it is not clear) and the other documernts such as Bill of Sale will show a history of UK ownership and (again I am assuming) the last Bill of Sale was from a private UK citizen.

I did qualify my comments by saying that they would not be interested unless they thought an offence had been committed. The circumstances that you describe would likely give rise for concern.
 
With respect Tranona, in your second paragraph you are misrepresenting your own post on this. You wrote that foreign VAT folks would only take interest if they suspected an offence. I agree with that. You then wrote (and I'm paraphrasing you, but doing so accurately) that even if they suspected an offence, the UK flag would make them leave you alone. That just isn't correct: the UK flag would give you no shield if they suspected an offence
 
Tranona said:
It does, however, make sense to try and get a copy and you are lucky as the builder (and probably the dealer) are still in business. They will probably charge you a fee but it is worth it even if you never need it as it will save you a bit of hassle when you come to sell.
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I agree with Tranona but note my other comment above about the important fact being that there was, in the past, at least one "taxable supply". A previous seller MAY be cautious about providing a copy of an invoice (possibly on confidentiality grounds) but be more willing to provide a written statement that the boat was the subject of a taxable supply. If made on letterhead with the VAT number quoted, I'd say that would be as good as (possibly better than)** a copy invoice.

** I say "better than" because such a statement would be: (a) contemporary (as opposed to 10 years old); and (b) an "original" document (as opposed to a copy).
 
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To answer your point on this, if a boat is sold VAT-free to buyer #1 on the grounds it is a NMT to be exported within 2 months, and buyer #1 then fails to export it, and fails to pay the VAT then due on it, and then sells the boat to (bona fide) buyer #2, the primary VAT liabilty remians with buyer #1 but upon his default the seize-ability of the boat by HMRC survives in law, so buyer #2 can have his boat seized. Pretty obscure/unusual set of facts though, as you say! I dont think there has ever been a case on this point....
 
TargaLout said:
I was stopped and boarded by Dutch Customs and Immigration three weeks ago off, er... Holland and they were happy with the authenticated copy that I had. I did also have part 1 mcga, ships and operators radio licence, ICC, and passports though, but I'm sure you'll have those also?
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Out of interest, was it important that it was an authenticated copy of the invoice? Would an ordinary photocopy do? (I would rather not keep top copies on the boat so I just have photocopies - but then again, I have never yet been boarded). I have presumed that it would be sufficient just to have copies of my purchase invoice, purchase bill of sale and (Guernsey) part one registration on board - am I underestimating the importance of top-copy docs? Surely I don't need the full bill-of-sale chain, do I?

Cheers
Jimmy
 
I do wonder if the case of original docs gets a bit misrepresented here. If you ended up in full conflict with tax office,ie court case, I could see a case where original documentation would be required, as, broadly, thats what HMRC say they will only accept (whether they are finally right or not on that point, I dont know...).
MBM cruises, RYA etc always say original docs, and that might well be best to avoid any possible hassle, but I cant help thinking it would have to be a pretty bad tempered customs guy to have reason to cause trouble over a photocopy. After all, in all likeliehood, you could get hm the orginal.
I did take the originals, on the basis the only way I'd lose them was if the boat sank, at which point I probably wouldnt need to prove VAT anyway !
 
Over Complicating This!

The advantage of buying a Broom is that you get lifetime support! They don't wash their hands of it - ever.

The ONLY place to start with this is with Andrew Stone at Brooms. As long as you have the hull number he'll be able to tell which dealer it was originally sold through (remember Brooms are quite to have sold it to an end customer themselves) and will almost certainly be able to supply copies of all key documentation. There were only 3 UK dealers at that time, Newark Marina, Offshore Powerboats in Lymington and Boat Showrooms in Harleyford & Teddington. All still operating and all still helpful.

There's also the Broom Owners Club who can always help.

BTW I took my Broom 38 to NL some years ago and on arrival in Vliessingen they went through every last document including VAT docs and even checked the serial numbers on the engines themselves to ensure that the numbers on the documentation corresponded! When going across now I carry laminated scans - not totally legal but it seems to impress them enough that evrything is legal that they accept I've got nothing to hide.

JIC - if it's hull 38/52 which was a 2000 year 38 I've got some of the docs.
 
Hi JTB. When as I mentioned I was stopped and boarded the officer explicitly asked for the following. He said I will need from you....
1- VAT Invoice. He was not concerned that it had "Authenticated Copy" and signed on it.
2- Ships papers. All original, I had builders cert, mcga part1, radio licence etc.
3- My qualifications. ICC etc
4- Passport.
He then wanted me to confirm my home address and the boats home port.
He had a good look around and then requested we have a "pleasant afternoons sailing" and not to be suprised if we were boarded again.
 
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gjgm said:
I do wonder if the case of original docs gets a bit misrepresented here. If you ended up in full conflict with tax office,ie court case, I could see a case where original documentation would be required, as, broadly, thats what HMRC say they will only accept (whether they are finally right or not on that point, I dont know...).
MBM cruises, RYA etc always say original docs, and that might well be best to avoid any possible hassle, but I cant help thinking it would have to be a pretty bad tempered customs guy to have reason to cause trouble over a photocopy. After all, in all likeliehood, you could get hm the orginal.
I did take the originals, on the basis the only way I'd lose them was if the boat sank, at which point I probably wouldnt need to prove VAT anyway !
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In most circumstances, for legal purposes, an original of any document is no more or less authentic than a copy (although an original has additional cosmetic value). It's the facts of the underlying transaction of which the document is evidence that's important. An original invoice that purports to evidence the sale of goods is meaningless if the underlying transaction was not, in fact, recorded in the books of the seller.

HMRC may 'insist' that "only an original invoice will do" but there is no legal foundation for that.
 
HMRC may 'insist' that "only an original invoice will do" but there is no legal foundation for that

Maybe, but most of us dont have the desire, resources or knowledge to argue the point. We d rather be boating somewhere! If you phone HMRC they WILL tell you that they will only accept the original document. Now, it might well be that is not supported in law, but whats a chap supposed to believe...!
 
gjgm said:
HMRC may 'insist' that "only an original invoice will do" but there is no legal foundation for that

Maybe, but most of us dont have the desire, resources or knowledge to argue the point. We d rather be boating somewhere! If you phone HMRC they WILL tell you that they will only accept the original document. Now, it might well be that is not supported in law, but whats a chap supposed to believe...!
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In one sense it does not really matter what they "insist" upon. There does not seem to be any reliable evidence that a private yacht owner in the situation most of us are in - that is owning a boat purchased from another private individual - has ever been charged with any offence related to failing to produce an "original" invoice. This is because there is no offence.

This does not mean there are not cases involving yachts where it might be necessary to provide evidence, but that would be in a case which involved the trader(s) not a private buyer - although the latter may be involved in the investigation by virtue of legally owning the yacht, but not have any responsibility for accounting for the VAT.
 
but.. but.. but.. and I have suggested this many times on this topic... if you ask HMRC a specific question, you will get their standard specific response.
People ask what docs they need to prove vat has been paid? (ok, HMRC's standard response may in fact be incorrect !)
People are NOT asking HMRC , do I have a problem with HMRC as regards original VAT payment if,as the current owner,I dont have the original invoice?

So, I would suggest, we make this issue worse by asking HMRC the wrong question.
 
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