Proof of VAT paid

[nimbusgb]

As I said you have to apply to the local authorities to find evidence in the boat's files that prove if the VAT is paid or not.

And if the boat is more than 6 years old the authorities have no record of it since the records have been destroyed ........... and round we go again.

On the basis of innocent until proven guilty one would expect the burden of proof to be on the state ie for them to prove VAT wasn't paid but of course that all goes out the window when dealing with tax authorities.

On another point what makes a bill of sale an official document. I have a copy of one that the RYA puts out, signed by both me and the seller. there are no 'official' stamps on it. I was thinking of getting a few Disney style kids stamps and applying them to the document just to make it look more 'official'

 

[Nick1150]

As I said above after 6 years the Authorities cannot give you a copy of the invoice, but can verify in written if the VAT is paid pr not with a letter

With that said, the VAT proof is either the original or the verified copy of the invoice. In any case though the documentation of the boat should state if the VAT is paid or not in the EC. Just have a look at your documents. They should state if the VAT is paid or not. In case it is not, and you have paid the VAT, you should have the VAT receipt of the VAT from the local Customs Authorities or the HMRC, depending on the country. One should go then to the local authorities and should ask to make a note in the power of attorney document stamped and signed. If the local authorities cannot do that then one should always have together with the rest of the documentation the VAT receipt.

Hope this helps

Nick



Hope that helps

 

[quaelgeist2]

continental coast

And if the boat is more than 6 years old the authorities have no record of it since the records have been destroyed ........... and round we go again.

On the basis of innocent until proven guilty one would expect the burden of proof to be on the state ie for them to prove VAT wasn't paid but of course that all goes out the window when dealing with tax authorities.

On another point what makes a bill of sale an official document. I have a copy of one that the RYA puts out, signed by both me and the seller. there are no 'official' stamps on it. I was thinking of getting a few Disney style kids stamps and applying them to the document just to make it look more 'official'

Along the continental coast, that is why it is strongly recommended to have a "historic" proof of VAT paid (commercial invoice or IR issued statement or customs receipt or, if older than 1985, records that show continuous presence in EU waters) on board.
With that you have prima facie evidence, from thereon it would be the guys in uniform (or black wet suits ;-) ) that have to proof that the boat has not been paid for.

As an aside - there might not be a proper legal status of "VAT paid", but the continental authorities use it de-facto anyway. There are numerous complications partly mentioned above, partly not, but for the average boater going abroad without intention to fight through admin procedures and courts it is simply easier to carry above mentioned proof of VAT payment in the EU.

Just my 2 cents.

 

[ari]

Originally Posted by ari
So what if the owner has bought the boat secondhand from the UK for instance, and turns up with it with no proof of VAT payment? How do your authorities check if the VAT is paid or not?

And if they cannot establish that it has been (because the boat is secondhand and there is no VAT paperwork) what happens next?

As I said you have to apply to the local authorities to find evidence in the boat's files that prove if the VAT is paid or not.

Sorry to go on about this but it's quite a big issue financially, and thanks for your input by the way, it's very interesting.

But I have to ask, what boat files? I have just sailed in from the UK on a five year old boat that's changed hands twice previously. I've got a Bill of Sale from the chap I bought it from and that's it.

So are you going to deem me VAT paid? I've nothing to prove that I am.

And if not, what happens next?

 

[Tranona]

With all the respect the above is not correct...

Atleast in Greece, and I know the same exists in other countries too, according to the P2105/138/07-06-2000 law, VAT is paid only once for every boat. If a boat has paid once VAT in the EC, and the same boat is re-imported in the EC, even from a different owner, then this boat DOES NOT have to pay VAT again.

Please note that all of my comments are based on specific EC laws and regulations. This is my job remember ?

Friendly regards

Nick

Sorry, I have to refer you to HMRC Customs Notice 236 which confirms that a boat loses "VAT paid status" if it changes hands outside the EU. It is then subject to VAT if re-imported into the EU. There is further explanation in the RYA FAQ sheet on VAT.

This has to be so because it is only transactions between two EU residents within the EU that are not chargeable events. However it would probably be difficult to prove where the transaction took place if the Bill of Sale clearly shows that the two parties are EU citizens.

There is no way as I have pointed out that you can ever be sure that VAT has been accounted for properly on a specific boat (except as below), so as in any transaction it is the nature of the transaction, not the asset that determines whether VAT is payable. So if the boat is returning to the EU it is liable for VAT unless it qualifies for relief which is broadly being returned by the same owner.

A private individual importing a boat pays VAT direct to HMRC and obtains a receipt. In this case the owner knows that VAT has been paid to HMRC and the receipt is proof.

 

[Tranona]

Originally Posted by ari
So what if the owner has bought the boat secondhand from the UK for instance, and turns up with it with no proof of VAT payment? How do your authorities check if the VAT is paid or not?

And if they cannot establish that it has been (because the boat is secondhand and there is no VAT paperwork) what happens next?



Sorry to go on about this but it's quite a big issue financially, and thanks for your input by the way, it's very interesting.

But I have to ask, what boat files? I have just sailed in from the UK on a five year old boat that's changed hands twice previously. I've got a Bill of Sale from the chap I bought it from and that's it.

So are you going to deem me VAT paid? I've nothing to prove that I am.

And if not, what happens next?

It is irrelevant if you sail from the UK to Greece as the rules are EU wide. If you bought the boat privately then no VAT was involved. The Greek authorities are not interested as any VAT issues are the concern of UK HMRC - and they are only concerned if they suspect a VAT offence.

It is of course useful to have evidence but not essential. There is little credible evidence that any private individual has ever been charged with any offence because of a lack of a VAT receipt - because there is no offence.

On the question of ships papers, as I have pointed out there is no formal requirement for registration in the UK so a full set of papers as you would have for a Greek boat is a rarity. The only essential is a Bill of Sale which establishes your title to the boat. Registration on Part 1 registers that title. If you travel outside the UK with your boat you need to be able to show that your boat is UK registered so that you are not subject to registration requirements of the country you are visiting. This is achieved either by your Part 1 certificate or registration on Part 3 (SSR) which is not proof of ownership, simply confirmation that it is registered in the UK. Note that registration issues are not part of EU law, but international law that puts into effect the UN convention.

All this is covered in the RYA information or (for regiistration) on the MCA site.

 

[Nick1150]

Dear Tranona,

I understand your points and eventhough they make sense I still have to insist that what I stated above exists in Greece and I know in Italy too. Never the less I cannot confirm what laws exist as far as boats is concerned in the UK. In Greece a VAT paid once for a boat cannot be paid again.

Dear ari,

except the bill of sale, where is your boat registered ? Which port I mean ? The port Authorties should have all files of your boat

 

[ari]

Dear ari,

except the bill of sale, where is your boat registered ? Which port I mean ? The port Authorties should have all files of your boat

It is SSR (Small Ships Registered). So the authorities would hold no files at all, and certainly nothing pertaining to VAT.

 

[Nick1150]

It is SSR (Small Ships Registered). So the authorities would hold no files at all, and certainly nothing pertaining to VAT.

sorry ari I have no clue about that In fact in Greece one has to register even a 3.10 m dingy !!!

That's why you were asking ? Sorry I didn't know the SSR

 

[Tranona]

Dear Tranona,

I understand your points and eventhough they make sense I still have to insist that what I stated above exists in Greece and I know in Italy too. Never the less I cannot confirm what laws exist as far as boats is concerned in the UK. In Greece a VAT paid once for a boat cannot be paid again.

QUOTE]

This could make an interesting EU test case if somebody is so inclined because HMRC are quite clear that their rules comply with EU law and all EU states operate the same. In previous threads on this subject cases have been cited where the issue of re-importation and VAT liability has been tested in court. In the UK (and France) the issue arises because of the proximity of the Channel Islands which opens the temptation to boats to be owned there and kept in France or the UK without VAT or free trade of boats being sold to CI residents and then re sold back into UK where VAT does become due.

You are right, however in saying that VAT is only due once - provided the boat is always sold by and to private EU residents. There is no mechanism (apart from through importation) for the authorities to collect VAT from individuals.

 

[ari]

OK, so just assume it's British Registered. There are two forms of this, neither have anything relating to VAT so aren't going to help you establish VAT status.

So I've turned up in your port, I've no proof of VAT paid status and my registration isn't going to prove anything either.

What now?

 

[Tranona]

It is SSR (Small Ships Registered). So the authorities would hold no files at all, and certainly nothing pertaining to VAT.

My previous post explains. All this (and more) is on the RYA site. Everything I have quoted here comes from that source or the MCA site except some comments about basic VAT principles which I know because I have VAT registration for my business.

 

[ari]

Yes I know the theory and agree.

What I'm trying to establish is what happens in a foreign port if you turn up with no proof of VAT paid status?

This whole thing is turning out to be the biggest red herring in the world and all the "advice" from magazines, RYA, HM Customs etc is rapidly looking bogus.

 

[Hurricane]

OK, so just assume it's British Registered. There are two forms of this, neither have anything relating to VAT so aren't going to help you establish VAT status.

So I've turned up in your port, I've no proof of VAT paid status and my registration isn't going to prove anything either.

What now?

I suspect "what happens" is different depending on which country "your" port is.
In the UK, there seems to be nothing to prove if you bought the boat from another private individual and as far as I can see that is the case for the rest of the EU.
However, it seems that it is possible (but I dont think there are ANY examples) that the authorities might (and only might) ask for proof of VAT. IMHO, they would be out of order in this case (where a boat has been bought privately) but that wouldnt stop them ruining your holiday. Spain, it seems, act first and then ask the questions later.

FWIW - I have never been asked for proof of VAT but virtually every port outside the UK has asked for registration docs - they, generally, dont actually read the docs - just photocopy and file them. BTW - the registration number seems more important than the actual docs.

 

[Hurricane]

This whole thing is turning out to be the biggest red herring in the world and all the "advice" from magazines, RYA, HM Customs etc is rapidly looking bogus.

Absolutely

 

[ari]

So basically all that's needed is a European ruling on this then?

Then we can forget this silly VAT nonsense once and for all.

With VAT on a £100,000 boat being £17,500 this seems a much bigger issue than the red diesel thing that was getting everyone up in arms recently, I can't understand why more of a fuss isn't made about it.

 

[Tranona]

So basically all that's needed is a European ruling on this then?

Then we can forget this silly VAT nonsense once and for all.

With VAT on a £100,000 boat being £17,500 this seems a much bigger issue than the red diesel thing that was getting everyone up in arms recently, I can't understand why more of a fuss isn't made about it.

No, if you hang around here long enough you will discover there is nothing new and HMRC are not going to change their advice. However, if you do get round to reading the copious material on the RYA site you will see plenty on steps they have tried (unsuccessfully) to take with HMRC.

The most telling thing is that they have carried out surveys and discovered no significant cases of any private individuals having real problems from the authorities here or abroad. There are a few (mainly anecdotal) cases that some officials can be awkward about it, but that is all.

So. relax and don't worry about it. If you have your SSR, Bill of Sale, Passport and insurance you will not experience any problems.

BTW VAT would only be £15k currently - and as I have pointed out endlessly there is no mechanism through which HMRC can send you a bill for that amount!

 

[ari]

BTW VAT would only be £15k currently

Good point, well made!

Agree (again) with all you say, hence interested to see what a foreign customs official would do faced with a boat that has no proof of VAT paid. Hence my questions above.

At the moment we seem to have a very odd situation regarding this, no actual proof needed, legally or otherwise, yet still all advice pointing to it being needed.

Bizarre, especially bearing in mind the sums involved.

 

[Tranona]

In the whole tax scene the sums are piffling and HMRC has its hands full of lots more important things!

 

[nimbusgb]

As I said above after 6 years the Authorities cannot give you a copy of the invoice, but can verify in written if the VAT is paid pr not with a letter

I'd be prepared to pay for such a letter. How do I go about getting one? every time we have tried to get round this we have hit a brick wall.

- boat originally owned by a Greek charter company then sold to a private owner ( and because of Greek law at the time 'deemed VAT paid' ) then I bought it.