Proof of VAT

[Dek]

Yes the hot potato again.
I'm off to butter melting countries next year and I thought I was OK, now I'm hearing horror stories.

My boat was built in 1966, bought by me in 1997 and is Part 1 registered.
I understood that I do not need to prove any vat payments. Now somebody tells me that I have to prove it was in UK waters in 1992, this seems next to impossible.
Is this info correct?

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[rjp]

I'm in a similar position with my boat, though I'm not going anywhere at the moment. Basically the 1992 thing is correct (there is a specific day which I don't recall offhand). However, in theory, if you have a UK bill of sale, which being part 1 registered you should have, this is supposed to prove to any other country's official that your VAT status is a matter for HM Customs and Excise and none of their business. I don't know if this works in practice - perhaps others will comment.

There is information on the HM Customs and Excise web site and also some on the RYA site I recall.

John

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[Althorne]

I too have just been through this with Customs and after a number of telephone conversations over the course of a couple of weeks I was told that because my boat was built 1977 (even though I have no physical proof of this), is British (English in fact) manufactured (even though self completed by first owner) and I have a receipt that says I bought it here from it's last owner privately and that it was unlikely to have been exported so purchase tax would have been paid then, all I need to carry with me to any other EU country who might question it's duty levige is the Bill of Sale I got when I bought it 3 years ago.
When I questioned further about possible problems she advised that Customs no longer give out receipts for boats in our situation and anyway they have yet to run into a problem. So I was assured in no uncertain terms that my sales receipt was prove that somewhere along the line they are happy the Vat in the form of purchase tax was paid so other foreign countries will accept it.

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[smee]

As it was built in 1966, and as long as you have proof of that, it is exempt as it was built before VAT existed.

Only boats built after April 1973 and before 1st January 1985, have to qualify for Exempt status by having been in the EU (excluding Channel Islands and Gib) on 31st December 1992.

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[burgundyben]

where did you get that info from? This has been a headache of mine for sometime, if you are right then it goes away as my built 1968.



<hr width=100% size=1>My house is for sale, 2 beds, Hamble.

 

[AndrewB]

My yacht definitely wasn't in the EU on 31st Dec 1992 (the qualifying date). I've been quizzed a couple of times about VAT by European Customs officials - the moment they realise the yacht was British built prior to 1st Jan 1985 (the other qualifying date), they lose interest. UK Customs have also said its OK. So don't worry.

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[launay]

This is not strictly true. As a specialist classic yacht yacht broker I have to deal with this issue regularly. The fact that a yacht was built before VAT was introduced DOES NOT imply exemption for VAT. In fact, no secondhand yacht of any age is exempt, to use the word as it is interpreted by the Customs and Excise. For a yacht to be 'deemed VAT paid' it must be both physically in European Union waters at 31 December, 1992 and AT THE SAME TIME, in European Union ownership.

I recently had the case of a yacht built in 1920 in England, which was in England continuously until 1990 when UNDER THE SAME ENGLISH OWNERSHIP she went to the USA on a cruise. She returned to the UK in 1994 and upon the sale to another UK buyer, she was assessed for VAT on the full sale price at that time, being her current value, because she was out of the EU at the cut-off date.

If the previous owner had paid the VAT in 1992 it would have been assessed on the very much lower value applicable then.

There is a twist to this, though. If you buy a very old yacht-the age is not specified, but early 20'th century would be a guide-which is outside the EU, then provided you apply BEFORE it comes into the EU, you can if you are willing to be very patient in getting passed from person to person on the phone, apply for a 'binding tarif' which assesses the vessel at a VAT level of just 5% instead of 17.5%. I have just done this on my own yacht, built in 1908.

Mike Burnett
Classic Yachts and Tall Ships Brokerage

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