TAX PAID

abbott013

abbott013

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I have finaly found a boat on the web. The boat was advertised as tax paid, but after speaking to the owner it has emerged that there is no such recipt. The boat has been registered at lloyds, would this be proof of it being a english vessel, there for duty has been paid. If not can anyone tell me how the tax would be calculated, ie on original price of boat,or what it is worth now.
 
I would think the tax will be based on the purchase/value price now when imported into the new country..... it would be in your interest for it to be when new, but I don't think it will be.
 
The registry does not convey any specific VAT Paid status, as the yacht could have spent some time out of the EU and thus have lost its VAT PAID status. The main thing is to prove that it was paid originally (if it is a young example) and that it has remained in EU waters. There are lots of WEB sites explaining this and there are a few posts on the forum as well. If you do need to pay VAT then it will be based on an independent valuation, so you can could on the valuation being fairly close to the sale price if you are purchasing in the UK. I've been through this and hope that you can prove her status as already VAT paid.
 
the boat was built in 1981, i have spoken to customs and they are telling me, if the boat was built before 1985 that it would be vat exempt, but to prove it i need evidance the boat has been in the uk since 85. any view on this would be appreciated
 
Went through this myself back in August. I contacted RYA legal dept and recieved the following reply:

SECONDHAND BOATS:
If you buy a second-hand boat within an EU country, you should ask for proof that VAT has been paid in the same way that you would in the UK. Proof will generally be the original VAT receipt or receipted invoice from when the boat was new, although some countries incorporate information about the VAT status of boats within the registration system.



Current law demands that EU residents should only use a boat within the EU if it is VAT paid or ‘deemed’ paid. Customs state that documentary evidence in support of the boat’s VAT status should be carried with you at all times.


VAT PAID STATUS:
Documentary evidence in support of the VAT status might include:
• an original invoice or receipt;
• evidence that VAT was paid at importation; and/or
• invoices for materials used in the construction of a ‘home build’ boat.

The rules state that original documentation must be carried onboard at all times, however, this creates practical problems; paper and water do not make for a great combination, especially over a long period of time. We suggest possible solutions would be to have certified copies taken and have them laminated. Keep these on your boat at all times, keeping the originals safely at home, enabling you to produce the originals when and if required. You may still find officials asking for original documentation and we are currently discussing this specific issue with government officials to find a practical solution.


VAT DEEMED PAID STATUS:
Under the Single Market transitional arrangements certain boats in use as private pleasure craft are ‘deemed’ VAT paid under the Age Related Relief Scheme. However, in order to avail yourself of this scheme, the following must be evidenced:


That the boat was in use as a pleasure craft on 1st January 1985, documentary evidence in support of this is required, evidence in support may take the form of :
• Part I Registration;
• Marine Survey;
• Builder’s Certificate; or
• insurance documents.

AND

That the boat was moored in the EU on 31st December 1992, again documentary evidence in support of this is required in the form of:
• receipt for mooring;
• dry dock records;
• boatyard repair invoice; or
• receipt for harbour dues.


As Austria, Finland and Sweden joined the Single Market two years later, the relevant dates are – ‘in use’ before 1st January 1997 AND ‘moored’ in the EU on 31st December 1994.


EU ACCESSION COUNTRIES:
Cyprus, Czech Replubic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia joined the EU on 1st May 2004 and as such the relevant dates for the Deemed Paid Status are ‘in use’ before 1st May 1996 AND ‘moored in EU’ on 30th April 2004.

The rules within EU member states may differ slightly and we strongly advise you to contact the relevant EU member state for detailed guidance.


FURTHER INFORMATION/CONTACTS:
For further reference get yourself a copy of Notice 8 Sailing your pleasure craft to and from the United Kingdom from HM Revenue & Customs. This notice explains the Customs requirements for private individuals who sail their pleasure craft to and from the United Kingdom.

HM Revenue & Customs website address is: www.hmrc.gov.uk.

National Advice Service: 0845 010 9000
National Yacht Line: 0845 723 1110


Disclaimer:
This leaflet provides general information only and is not exhaustive. It is not to be considered as providing legal advice and should not be relied upon as such. The RYA does not accept responsibility for any errors or omissions contained in this leaflet, or for any loss caused or sustained by any person who relies on it."
 
one last question, how do i find out if the boat has any finance or mortgage agreement outstanding on the vessel. would buying through a broker guarentee no finance outstanding
 
[ QUOTE ]
would buying through a broker guarentee no finance outstanding

[/ QUOTE ]
I very much doubt it..... if its Part 1 registered, which for any finance it has to be, they should be able to tell you.
 
The RYA advice is no doubt a correct interpretation of the rules as seen from the UK. But in the UK you rarely have a vat question coming up so its not the UK you need to worry about. And in the rest of Europe, a UK view of how the rules work doesnt always carry that much weight. Try explaining the RYA view to a French Douanier who wont speak English .............

There is no practical way of ensuring the boat is free of charges. True a part 1 reg will tell you whether there are any mortgages registered against the boat but an SSR wont tell you anything. I tried writing to all the known marine mortgage companies and got lots of replies saying there was no charge, but in each case there were legal weasel words at the end saying in effect that it their reply was wrong they accepted no liability for it.

The best answer I could find was to buy from a guy whose financial standing was clear (ie houseowner, business owner, good credit rating etc). get him to document the ownership status and be prepared to sue if he misdescribes. Wont help with the French customs man but it might with the loans issue.

Not very satisfactory really, but you have the civil service to thank for it. They know whether vat was paid - they are simply not prepared to look it up and help you.
 
Bugger, Wight Dawn was built in 1975 (before Vat existed) and should be exempt, but how do I prove it was in the country? I have only owned it since 1997. When I bought it there was a thick "biscuit" of sticky licences for ports (Weymouth, Ramsgate, Cowes etc.) stuck to the mast, but these looked a bit os a mess so I removed them. Is it reasonable for HMRC to expect owners to retain receipts going back this length of time?
 
the boat was part 1 registered up until a few months ago, i am doing a search on the vessel, but am not sure what it will turn up, all i do know is they have records going back to 93.
 
If the vessel has been Part 1 registered you will be able to establish its status as far as outstanding mortgages, finance and ownership is concerned. However, you would be advised to check out the recent history since the Part 1 expired.

On the question of VAT status, my understanding is that you need to satisfy the following:

1. The vessel was in use in the EU prior to 1st June 1985 AND
2. It was in EU territory on 31st December 1992.

At least this was the advice I received when looking at VAT status for a vessel I was buying four years back.

Cheers, Ron.
 
what would you do in my possition, i am in the middle of buying a boat that was part 1 registered up until a few months ago, no other documentation but i am doing a rigistry search which will show history going back to 1993, the boat was built in 1983 and the price is very good, but still subject to survey.
it seem that there are a lot of people and boats out there that can not prove there vat status, am i worrying to much ?
 
If you don't mind me asking, how much is the boat worth/you prepared to pay?

Put it back to the vendor, if they can't prove the VAT status of the boat, try to reduce the price by said amount to allow for you having to pay it should it arise. Probably won't work, but worth a try /forums/images/graemlins/wink.gif
 
Hi Bananaman,

Yes, I do think you are worrying too much but it is worth trying to get something or you may find a future buyer equally paranoid and maybe loose a sale.

Why not ask the broker or vendor to confirm to you in writing when and where the boat was built and warrant that it has never been out of the EU for one uninterrupted period of three years? I'd be happy as a buyer with that as I think I'd have enough to dispel any UK C&E worries should you ever be the one in million they choose to investigate.

And I've yet to hear of anyone being hit by overseas customs for VAT proof on a boat so clearly built before VAT was due - so if anyone alse on the forum has direct experience of this happening maybe they could share that with us all?

Good luck
JOHN
 
One thing I have failed to see any body write about the VAT fraud perpetuated by the Inland Revenue is this:

If the boat is taken out of the EU say to Turkey by the person who paid the vat on the boat then it looses its vat status after 2 years. This can be rectified by the ORIGINAL owner/vat payee bringing the boat back into the EU and registering that action by way of his transit log. If the boat is sold after two years and out of the EU then the purchaser will be liable to VAT on re-entry in to the EU. The way to overcome this is to pay your deposit in the foreign country and get the owner to sail the boat over to the EU say Bodrum to Kos register the boat by way of transit log and you pay the balance and write the receipted invoice out there and then. Job Done. All excepting the old owner would probably like a lift back
Kristoria.
 
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